Ann: Change of Director's Interest Notice , page-6

Dogsie - they have changed the rules recently regarding employee options, that in some cases make them taxable in either the year they were received, or in the year they are exercised.

Without knowing his personal information, the condition of the options i.e non-coversion status, and a few other factors - it would be hard to determine whether or not he can defer the taxation treatment.

I'd estimate the he would not be able to defer the treatment and would be taxed upfront. If he received all the options in the year just gone - he would have had 1.8m options. The taxable value of those is market based - so assuming say a 35c average cost - those 1.8m options ($0 cost) would value at $630,000. Tax of say $240,000 would be an average tax rate of 38% - so quite possibly within the ball-park of his actual liability.

Hope that has helped. Once again Employee options are a complicated area, made more complicated by the recent tax law changes. Still hard for me as an accountant to get my head around.