>> Ellen, I believe you are right about the "additional shares, apparently, during 1998 34.8 MM shares were added to the count (more than doubling)of which 29 MM were due to options exercise and thus I am assuming that the balance of $5 MM was the Chairman chunk of 5 MM (does it not bother you that insiders got to dilute external holders by more than a factor of 2 in one year?). However, the same source (the last 10 KSB, I believe note #6) also states that during the year (1998) 19,795 MM were granted. Since they started the year with 30 MM in options and only 29.8 were exercised, I presume the whole 19.795 MM are still outstanding, the registration statement the S-8 was talking about grantable options, so I do not know if any of those 17.5 MM were granted and which if these are in the count of outstanding (actually, there is a little confusion there since the same document states that at the end of 98 only 3.64 MM options are outstanding, if anyone can clarify this fine). <<
From the 4/1/99 10K for year end 12/31/98:
(8) Stock Options
Number of Weighted Average
Options Exercise Price
---------- ----------------
Outstanding at December 31, 1997 30,366,746 $ .1675
Outstanding at December 31, 1998 3,643,726 $ .3027
Exercisable at December 31, 1998 3,577,042 $ .3027
Options granted during 1998 19,795,755 $ .1779
Options exercised during 1998 29,815,691 $ .1747
Options forfeited or expired during 1998 2,811,334 $ 1.4973
Options outstanding as of December 31, 1998 expire at various dates through May 31, 2003
To be frank, I would need to go back and re-read the information on the employment agreements to see when each candidate becomes vested and for how many shares at each stage of becoming vested.
As to the 5 million shares granted to Mr. Gordon, these were restricted shares although it isn't stated for how long. One year? Two years? Again I need to review details on the employment contracts and will do so at a later time.
>> So, I am not sure how many shares there will be at the end of the exercise, nor do I know how well the public share holders are going to be taken care of, what is crystal clear however, is that the Chairman is very well taken care of, that is often a warning signal in my book. Insider have also sold a good 2.2 MM shares during the 1998 period, which is another piece of evidence going into the left side of the balance. <<
Do you consider "taking care of" the Chairman to be an unusual practice? What do you consider to be "reasonable" compensation?
Since you did some research today, can it be assumed that you are aware of the company's 34% decrease in operating expenses for 1998 in the areas of salaries & related expenses, contract services, etc.?
Also, can you please show where you see that 2.2 million shares were sold, as you state, during 1998 by insiders? |
