Dear JDN: I have not finished reading the proxy statement, but in terms of your question #2:
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2. Requesting approval for a 25 MILLION share employee stock purchase plan.
Basically allows SELECTED employees to buy stock at 85% of market. My concern is
seems to me that this just aggravates the situation of employees SELLING at the
inappropriate time for the rest of us shareholders. I see nothing in it that would cause
them to BUY AND HOLD. Looks like just another bonus type plan. What do you all
think?
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Granted, I am not done reading this thing so I probably have not hit the real glaring stuff yet, but take a look on page 7, specifically the sections on "Participation"[A] and "U.S. Federal Income Tax Consequences (continued on page 8)."[B]
Also, since the amount an employee can contribute is 10% of his/her salary with a ceiling of $25,000, I'm not sure how big an impact sales of shares derived from the plan have/could have in the future.
Right off, it looks to me as if there are tax incentives to hold the shares more than 2 years [B].
It also looks to me as if almost all employees can participate: "Generally, all regularly employed Employees are eligible to participate in the Plan... [p. 6, "Eligibility"].
What I do not think is right, comparing eligibility as stated here with that of some other companies, is the remained of the sentence cited immediately above: "... although Compaq may impose an eligibility period of up to two years of employment before an Employee is eligible to participate and may exclude part-time Employees." [Is this what your are referring to, JDN?] To give an example from Home Depot [I do not hold any shares], a friend's daughter got a job there four months ago. From pay check #1 she was able to have money taken out for HD's employee stock purchase plan.
What gets me more than the Employee Stock Purchase Plan are the share perks the Board members get, "... to align their interests with those of Compaq's shareholders (p. 5, column 1, top)." Check #4 on that same page then "Directors' Compensation" on page 9.
Lynn |
