Part I: How the Site Can Help You

Let's begin our exploration of the site with a case study that both illustrates the dangers of "conventional" stock option planning and how Critical Capital™ provides the key that enables sound decision making.

What's conventional planning? It's planning that focuses solely on minimizing taxes and maximizing gains. It's what we call the "TAX/MAX Syndrome."

Let's meet George and Cindy and find out how TAX/MAX led to a financial disaster. Then we'll show you how the tools and techniques you'll find here can help you avoid making the same mistakes.

George is 42, a marketing executive with a health care company. Married to Cindy, who is 40, they have two children. In April of 1992, George had joined the company and was given an initial grant of 40,000 Incentive Stock Options with an exercise price of $2.35 per share, the price of the company's stock at that time. He was promised another grant if he did well, which he did, and in April of 1993, he received another grant of 20,000 Incentive Stock Options with an exercise price of $4.50 per share. The company and George continued to do very well and, in recognition of his contribution, in April of 1996, he was given 70,000 non-qualified options with an exercise price of $50.00 a share, the market price at that time.

The company was doing great and by July of 1997, the stock was trading at around $80. George's options were all vested by that time and were worth more than he and Cindy had ever imagined having. Here's what the options were worth:

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