Ron,

The profit on any exercise of stock options is taxed at ORDINARY INCOME levels (25 to 35% for well-paid individuals, PLUS state and local taxes), no matter how long you've had the options sitting there waiting to be exercised. IF you then hold said exercised options for a period of ONE YEAR and sell, any gain THEREAFTER (i.e., from the price he exercised at, somewhere around 50-60 cents) is subject to a long-term capital gains tax of only 15%. Assuming, of course, that there IS a gain -- which one would think Mr. Johnson is hoping there will be. Otherwise, just hold on, wait and see and incur NO tax liability until options are exercised. (And no, he wouldn't have to exercise them no matter what, even if the price plummeted below his grant price; the options would just be "underwater" and worthless. If he does not exercise them before the expiration date, they, again, become worthless, and he does not incur any tax, not realize any reportable gain/loss.)

Looks like a good sign, time will tell.

JMHO. Regards.