Presents why companies are changing their Insider Trading Policies, They are in effect moving billions from the employee/grantees to the companies and to the wealth managers. The changes constitute a breach of the grantee/employer contract. John Olagues www.truthinoptions.net olagues@gmail.com 504-875-4825 http://www.wiley.com/WileyCDA/WileyTitle/productCd-0470471921.html

1. .
Some
Insider Trading Policies
breach the equity compensation contracts between grantees
and the employer, thereby diminishing the value of the equity
grants to the grantee/employees for the benefit of the company.
John Olagues
olagues@gmail.com
504-875-4825

2. Insider Trading Policies and Equity Compensation:
.
Some Insider Trading Policies prohibit (or claim to prohibit)
selling calls and buying puts at all times, whether the covered
person possesses non-public material information or not.
Those Insider Trading Policies even disallow selling "qualified
covered calls" in blind trusts and pursuant to 10 b-5-1 plans
and when selling long stock is 100% consistent with 10 b-5.
However, under these conditions the possibility of a civil or
criminal proceeding being brought against the "qualified
covered call seller" or covered put buyer or his employer for a
Rule 10 b -5 violation is zero. There never has been a Rule 10
b-5 proceeding under such or similar conditions.
So why do they make such prohibitions if the need for them is
zero?

3. .
The answer is that most Stock Plan Documents and Grant
Agreements do not prohibit selling calls or buying puts and the
plans can not be changed by the whim of the companies to
diminish the values of the equity compensation to the grantee.
If company changes the plan documents directly and the
changes are harmful to the grantee/employee, the company
has breached its contract with the employee/ grantees. If they
use the Insider Trading Policies to indirectly change the plans,
when the change is completely un-neccessary to comply with
Rule 10 b-5, the contracts that the employee has with the
company are similarly breached by the companies.

4. . So why do the companies risk litigation for breach of contract
by diminishing the value of employee stock options through
prohibitions inserted in Insider Trading Policies that have no
value as far as protection against possible violations of 10 b-5.
"Qui Bene" Cicero asked?
The Company and the Wealth Managers benefit but the
employee/grantee loses, because the most efficient strategy to
manage the grants of employee stock options is to sell calls
and to a lesser degree to buy puts versus substantially in-the-
money vested employee stock options.The employee is
required to assume very big risks of loss because of violation o
his/her contract with the company. Perhaps the designers have
no idea of what the consequences of these Insider Trading
Policies are. Or perhaps they do fully understand the
consequences of their policies.

5. .
Just recently Apple Computer inserted a provision into its
Insider Trading Policy that appears to prohibit selling
exchange traded calls or buying puts versus long un-
restricted stock or at any other time, even when there is zero
chance of a violation of 10 b-5.
This prohibition eliminates the only efficient way to manage an
employee's Apple equity holdings and as a result will transfer
billions to the company from the employees, while also
benefitting the wealth managers as they now have an excuse
for not using an efficient management method.

6. .
But the Apple Employee Stock Plan and the grant agreements
allow for selling calls and buying puts to efficiently manage
their equity compensation grants.
So this constitutes a breach of contract. If you are an
employee of Apple holding shares, or equity compensation
grants, you are affected by this breach, which interferes with
your ability to manage those assets efficiently. You should
bring this matter to the attention of Apple and consider a suit if
you are damaged as a result of the breach.