Late in 1999, Natalie Attired, a recent MBA graduate, signed a four-year employment contract with Generic Co. that provides her with an annual salary of

$90,000. In addition, at the start of each year, 2000 through 2003, Natalie received options to purchase 3,000 shares of Generic’s common stock at the market price when the options were received. These options are exercisable for four years from the date of receipt. Assume the following information related to these options: