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To: Stock Farmer who wrote (114487)	2/26/2002 12:10:20 PM
From: Wyätt Gwyön	Respond to of 152472

great post!

To: Stock Farmer who wrote (114487)	2/26/2002 12:35:26 PM
From: engineer	Respond to of 152472

Ok, here is an IQ test for you. Example 1) You start a company and sell it to investors for $1M and sell 1M shares, but nobody (except the top 5 guys who formed the company) works at the company. You provide only cash bonuses and a pay rate that is way higher than industry because you can;t keep them unless you pay equivalent wages (which for other companis is cash plus stock) to the employees and watch them very carefully. You never dilute teh stock. the stock grows by 5% a year as these people perform well, but make no real gains. Your turnover rate is more than 5% and your top management and your best engineers keep using the place as a training ground before they go off and get a real job. Example 2) You start a company and sell it to investors for $1M and sell 1M shares, but set aside another 1M shares for stock options. You award stock options as a deferred compensation to the employees over time to work towards increasing their share. the options vest over 5 years. Now you tell hte employees they get alot of money if they make the stock go up and you pay equal or less to the employees than industry scale in cash wages. but you do not have to borrow cash or take on debt long term to pay the cash bonuses at the end of the year. Now the employees take this to heart and bring out top notch products, management stays in place and your turnover rate is way less than 2% year after year. You are able to fund alot more R&D with this retained cash and you soon have invented a few big products which sell well and you are able to bring them to market. So from this, your stock grows 2000% over 10 years. (from 1985 to April 1999) Now which one has a better STOCK PRICE for the investor in the long run? Which one has less REAL dilution? Which one has a much better long term goal and longer term staying power (i.e. no debt) ? Which one is just whinning about monday morning quarterback BS?

To: Stock Farmer who wrote (114487)	2/26/2002 4:01:30 PM
From: David E. Taylor	Read Replies (2) \| Respond to of 152472

John/qveauriche: Methinks that might be an employee insider indication worth keeping an eye on. There are almost 56 million in the money employee/director/officer options that are exercisable right now, but which have not been exercised. These break down as follows: Range of Options Exercisable Exercise Prices # of Shares Wtd. Avg. Ex. Price $0.02 to $3.39 8,893 $ 2.94 $3.43 to $6.21 28,220 $ 4.95 $6.25 to $8.01 15,399 $ 7.09 $8.02 to $19.25 3,196 $ 14.04 Why so many unexercised options that would clearly be profitable to exercise right now with the shares selling at $35 or so? I would guess these are options that have vested since the last opportunity to take advantage of a high stock price in 1999, i.e they couldn't be exercised then, but can be now. I note from the most recent 10K and proxy that in FY1998, options to purchase 49 million shares were exercised, plus an additional 5 million shares were purchased through the employee stock purchase plan. In contrast, in FY2000, only 22 million options were exercised, and only around 750k shares purchased, and in FY2001, only around 15 million options exercised and 760k shares purchased. There are other possible explanations for this of course, but one possibility is that in 1998, the employees knew that good news, a profitable year, and a run up in the stock were all coming. So maybe these profitable options are sitting unexercised because their owners are confident of the upcoming year or so and know that they will be able to exercise and sell at a much higher price in the near future than they can right now? Or maybe they hold the same ideological views as John, and are not exercising their options on principle, because they don't want to impose their cost on the shareholders? (<vbg>) David T.