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Show TheSalt Lake Tribune BUSINESS Sunday, July 27,2003 SLTRIB.COM MorTrLey Koou Options vs. Grants I read that Microsoft will stop issuing stock options to employees, replacing them with ® grants of stock. Is this a good thing’ LB., Janesville, Wis. It sure is. The argument for options has been that they motivate employees. But toooften, whena stock price sinks, employee stock options are repriced or replaced, or additional options are awarded. Employees end up with less downside risk than we share holders bear. In addition, options sport expiration dates, possibly leading to short-termthinking amongoptions-holders. Also, most companies thatissuestock options have also beenfailing to take into accounttheir expense when calcu lating corporate earnings. When employees receive shares of stock, they are clearly motivated to help the company succeed and boostthe long-term value of those shares. If other companies follow Microsoft's lead,this can be a the splitting of marital assets, your other income (such as interest and dividends)will change, and mortgage interest may be divided or elim- Life Changes, Tax Changes inated. Assets will also be divided and the tax impact will follow the Whenfacing life changes, attend to tax changes,too, lest you laterfi:ce headaches or penalties. A few exam- ples: ek “ “pink sheets” I sometimes read about? WR., Houston Firstoff, understand thatfor a publicly traded company tobe generally taxable to the person and thelike, and we the best shape right now needs to meet certain require to reflect your new filing status. With more shares! can controlthe investments. You mightalso be able to move your employer to your new employer. If you are receiving retirement payments, review your withholding, and determine whetheryour tax bracket will change. Find out whatpercent. age,if any, of your Social Security benefits will be taxable. There’s much more to know. To learn more,visit www.Fool.com/taxes or that point, shares might be more expensive. Even believers with limited funds might invest incrementally,via direct investment www.IRS.gov. The IRS Website has a W-4 calculator tool to help you. ae eececccccesvsscceccesecesessesoees trading. Firms that don’t qualify : are still traded, but they generally doso “over the counter” Born in 1927 and based in New York, | am in the media business, concentrating on technology and games.| reach more than 17 million readers per month, throughofferings such as PC Magazine, eWEEK,Baseline, CIOInsight, Electronic Gaming Monthly, (OTC). Some companiesaren't even included in OTClistings, though these havetraditionally been printedon pink sheets of paper the “pink sheets.” In short, pink sheet companies (and many OTCfirms)are ones we like to avoid. 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I read recipient nor deductible by tax withholding,so you don’t ments, giving evidence of some sizeandstability and frequent _—_‘Teceive about $500 per support is neither taxable to the for your employerto set up stantial other income, such as inter- Yahoo! Takes Overture Our smartest investment was buy- the person paying it. But child too little withheld.If you have sub- The Motley Fool Take A Decade of Dollars ing 125 shares of Citigroup back in 1992, for about $2,900. Today we have 754 shares, duetosplits receiving it and deductible by end up having too much or Lad Dur es person who retains the property, while forced sales of assets might generate capital gains. Alimonyis + A new career: Take care whenfilling out that W-4 form bility wonderful development in the world of corporate governance. What arethese Our Mission: To Inform, to Amuse, and to Help You Make Money Fool. Sorry, we can’t provide individual financial advice. Sendit in — see Write to Us Wal-Mart may be poised for banking leases activities not seen as a threat by community bankers in. Utah. Wal-Mart spokesman Tom Williams said the proposed leg- islation and amendments“really companies,” Williamssaid. Williams said those efforts in part were viewed by the company as a way to bring banking services to many of its customers underserved by the banking community. About 20 percent of Wal- @ Continuedfrom E] lave no connectionto our business. We don’t own any banks nor do we have any plansright now to get into that business be- checking accounts or use other insurance. They can take depos- yond the services we already offer.” bankingservices, Williams said. “We do wantto see those customersserved.” 800 stores nationwide with branches on their premises, but those bank branches are unaffil Without clear branching au thority from Congress, though, its, issue credit cards and make loans. From thestandpoint ofan individual consumer, about the only thing an ILC cannotdo is offer \dardchecking accounts if its assets exceed $100 million, In May,as part of aneffort to streamline U anking regula: tions following the enactment of the Gramm-Leach-Bliley Ac 1999, the House Financial Ser vices Committee approvedabill to allow banks and ILCsto ex pand across state lines without first meeting branching laws in individual states. Karlier this month, however, Rep. Paul Gillmor, R-Ohio, and Rep. Barney Frank, D-Mass., Wal-Mart has approxi iated with thegiantretailer, operating out of leased space. In addition, many Wal-Mart stores offer low-cost moneywire transfer: service especially popular among the company’s Latino customers, Williams said. “Right now we're also test: ing payroll check-cashingservices, which will cost a flat $3fee, in about 200 of our stores.” Utah Commissioner of Fi nancial Institutions Ed Leary said Wal-Mart to date has not proposed an amendment to the filed an applicationto organizea legislation that would makeit moredifficult for ILCs organized Utah ILC. Yet Ence of the Independent after Jan1, 2003 to branch across statelines, The move was viewed by manyas a clear effort to thwart any move Wal-Mart may maketo set up an ILCand enterthe in. terstate banking arena. TheJan, 1 date also would hinder branch ing by Sears, Roebuck & Co., which received Utah approvalto establishathrift andloan on Jan. 15, 2008. Utah Bankers Association President Howard Headlee said unlike bankers in therest of the country, the operators of com munity banks here see little problem with allowing ILCs to branch, even if they are owned by large retail organizations, “ILCs arenot new in Utah but theyare new and relatively un known to other folks across the country,” Headlee said. “We are Community Bankers of Ameri can noted Wal-Mart has tried several times in the recent past to get into the banking business. “Nottoo long ago they tried to enter into a partnership with Toronto’s Dominion Bank,” Encesaid, Congress also turned away Wal-Mart's effort in 1999 to buy Federal BankCentre, ings andloanin Broken Arrow,Okla. In addition, Wal-Mart last year failed in its bid to buy an ILC in Orange,Calif. “After the found out we were intereste the California legislature banned commercial companies from owning industrial loan ORGANIZATION as the competition is fair, we'll © AstraZeneca welcome it.” Pharmaceutical use them to offer additional fi nancial services to their clients. In addition, some ILCs are owned by automobile manufac turers such as BMW and GM, which link their operations to automobile sale financing and 3.74% 9.24% for qualiyng Bork One Home Equity Line ined rates os low ar quirements. Utah is part ofa coalition that allows banks headquartered in 17 states to freely branch within each others borders. But any foe aktyng Bork One Home tty Laorr= _—— bank that wants to branch into anyof the remaining 33 es must first acquire an existing bank in the state they want to enter. Headlee noted that two years from now, Preston Jackson, the chairman of Merrill Lynch's Utah-based ILC, will be named chairman of the Utah Bankers Association thefirst time in that organization's history an ILCexecutive will claim the top Il probably never com: pletely get away from discussing where the boundaries should be between services offered by banks and commercial compa: nies butto us [the Utah Bankers Association] it is importantthat the debate center around safety and soundness issues and not territory and competition,” Headlee said. steve@sltrib.com WHERE PLANNED: ATTENDANCE | Grand America RUNS THROUGH Citywide Best Western ‘Salt Lake Plaza TAKE ADVANTAGE OF BANK ONE’S LOW HOME EQUITY RATES TODAY, Build an addition, pay for college or consolidate debt at amazing rates. Stop by Bank One,click BankOne.com, or call 1.800.800.LOANandyou'll get an answer before you hang up. Low rates, fast answers. Unlock the moneyat Bank One. 1.800.800.LOAN BANKZONE. Indivimal ONswers™ | us | Friday 0 creel opgroval. Advert votes cre subiec to flank One's 50 cred crea, cetin conditions reticions inching guaran wa fre an Youre ond Comeuponding AatelPecntage RaeBOR ten Co Rae rate and depends onthe actuol loan amaunl or the omount of cn 4,000 THURSDAY © Ploesti Veterans Reunion vorloble rates os low os states have bank branching re- WEDNESDAY! © Tupperware low,low, lower. ofits stores even if it sets up a Utah ILC. As it now stands, individual TODAY A number of Utah ILCs are owned by stock brokerages that just got even Wal-Mart will find it extremely difficult to open branches in all Salt Lake Convention Calendar much more concerned with un. pt compet regulated or t itors [credit unions] but as long ‘Our low,low, low rates Mart’s customers do not have | Saturday Sewrre Salt Lake Convention Viator: Bearen Several smalier groups and trovel-related tours also will visit Salt (ake this week. ‘The Salt Lae Toebmame or flood inuranee may be 169 ‘on linea of $50, 2 |