Options should be structured carefully. Absent special factors, they should have built into them a retained-earnings or carrying cost factor. Equally important, they should be priced realistically. When managers are faced with offers for their companies, they unfailingly point out how unrealistic market prices can be as an index of real value. But why, then, should these same depressed prices be the valuations at which managers sell portions of their businesses to themselves? Except in highly unusual cases, owners are not well served by the sale of part of their business at a bargain price -- whether the sale is to outsiders or to insiders. The obvious conclusion: options should be priced at true business value.