Go out to Edgar Online. They had to file a proxy statement. I think it's a form 14A. Here are the highlights for the employee plan, the larger of the two.
"As of June 15, 2002, of the 24,800,000 shares authorized under the Awards Plan, an aggregate of 9,691,639 shares of Common Stock had been issued upon exercise of stock options granted under the Awards Plan, stock options to purchase an aggregate 9,961,930 shares were outstanding under the Awards Plan and an aggregate of 5,146,431 shares were available for future grants of options or other awards."
In other words:
24,800,000 Total in the plan
9,691,639 Awarded and issued (Included in the total float already)
9,961,930 Awarded but still outstanding
5,146,431 Haven't been awarded.
This means they want to increase the 5,146,431 to 7,146,431.
I don't really see that management has been selling large blocks. The insider sales are a fairly small percentage of their actual holdings. In addition, during the recession period there were almost no sales. It wasn't until the numbers started to turn around that they began to sell again. Besides, this is a significant portion of their compensation and it would only be prudent to sell to diversify.
As far as capital "drying up", that may be true in some areas, but QLGC is certainly not having any problems based on their revenue forecasts. This from a company that is famous for conservative projections.
I disagree with you that they should buy their stock back to cover the options. That is one method that companies use to hide their option expense. They announce a big buyback but somehow, the shares outstanding never seems to come down. (Dell is probably the worst offender that I've ever seen. I'd check CSCO out as well.) They spend hundreds of millions of the company funds on stock and yet the dilution remains the same. If QLGC's business was slowing dramatically I would be more concerned but it doesn't appear that it is.
There are also some interesting notes and addendum in the 10k that describe what their earnings would be had they expensed options using the Black Scholles accounting method. (Not really the best way to do it in my opinion.) |
