1. Arnold exercised an incentive stock option in 2004, acquiring 1,500 shares of stock at an option price of $80 per share. The FMV of the stock at the date of exercise was $110 per share. In 2006, the rights become freely transferable and are not subject to a substantial risk of forfeiture. Arnold sells the shares in 2007 for $165 per share. How do these transactions affect AMTI in 2004, 2006, and 2007?