[sb8244]

Yes, this is my understanding as well. You owe a lot of taxes initially (that you to pay to even exercise) and then you wouldn't pay AGAIN if the company goes bust.

That would, of course, suck, but you wouldn't "owe more" if the company goes bust. It would just be what you already paid now being worth less than what you paid for it.

I guess I don't understand the point being made with that in mind. If you took out a loan to exercise the options (don't do that), then that would be a big problem.