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Technology Stocks : COMS/USRX

COMS 0.00130

+18.2%

Nov 3 1:38 PM EST

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To: James H. Williams who wrote (1334)	5/16/1997 4:05:00 PM
From: David Lawrence	of 1384

They can't issue the shares unless they are authorized. Assuming the merger is approved, the share increase will also be approved. USRX has x-million share outstanding, plus x-shares "owed" for outstanding options (from grants), all of which are accelerated and exercisable. 3Com will issue new shares of 3Com in exchange for all of those shares (including those from the exercise of previously-granted-but-not-exercised options at a rate of 1.75x. So, for arguments sake, let's say there are 200 million USRX shares and options grants outstanding. In this scenario, 3Com will issue 350 million shares in exchange. Based on what you said, they will have 600 million shares available. As an existing 3Com holder you get nothing except a smaller piece of a much larger company. You will have the same number of shares, but there will be more total shares outstanding. My comments about "options" do not pertain to open-market options, which is a different matter entirely.

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