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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Kirk © who wrote (6413)	7/8/2003 7:05:08 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 25522

This is Big....only a matter of time before others follow: UPDATE - Microsoft to end stock options, start expensing grants Tuesday July 8, 6:18 pm ET By Reed Stevenson (Adds detail, CEO comments, share activity, byline) SEATTLE, July 8 (Reuters) - Microsoft Corp. (NasdaqNM:MSFT - News) said on Tuesday that it will end its long-held practice of awarding stock options to its employees and instead start issuing direct stock grants that will be expensed. The sweeping move, part of a plan to overhaul compensation for the more than 50,000 employees of the world's largest software company, would put the cost of stock-based pay on Microsoft's books, marking a departure from the practice of other technology industry leaders. Microsoft's stock award plan will take effect from September and the cost of the grants will be recorded against the company's earnings for the current fiscal year ending in June 2004. Microsoft will also expense the value of its previously granted stock options and restate past results to show the cost of such compensation, it said. In addition, employees with options that have exercise prices above the current stock price, will be able to cash them in by selling them to J.P. Morgan, Microsoft said. Chief Executive Steve Ballmer said that the new stock award plan better aligned employee compensation with the interests of shareholders since it would ensure that all staff have an equity interest in the company. "Employees will always have some long-term equity value to look forward to," Ballmer told analysts in a conference call. Microsoft's shares dipped slightly to $27.54 from their Nasdaq close of $27.70 after the announcement. EXPENSING OPTIONS Earlier this year, accounting rule makers started to formulate new standards expected to require companies to treat stock options as a regular expense, a move strongly opposed by many Silicon Valley heavyweights including Intel Corp. (NasdaqNM:INTC - News) In May, Microsoft said stock-based employee compensation under the "fair value method" would have cost Microsoft $656 million for its fiscal third quarter ended March 31. That added expense would have put Microsoft's third-quarter per-share earnings at 20 cents instead of 25 cents and reduced net income to $2.14 billion from $2.79 billion, it said. Pacific Crest Securities analyst Brendan Barnicle said that a similar impact was likely in future quarters, but said that the full impact of the changes would hinge on the number of outstanding stock options exercised in future. "It's going to create some confusion for investors," Barnicle said, "But I think Microsoft will set an example for the rest of the industry." Connors said that Microsoft would provide more specific detail on the impact of the new plan during the company's quarterly earnings announcement on July 17. About 600 of Microsoft's senior management will receive stock grants based on customer growth and satisfaction benchmarks, the company said. Ballmer and Chairman Bill Gates, who have never received stock options in Microsoft, will not receive stock awards under the new plan, Microsoft said in a statement. Both Gates and Ballmer were owners of the company before it went public in 1986.

To: Kirk © who wrote (6413)	7/9/2003 10:56:35 AM
From: runes	Read Replies (2) \| Respond to of 25522

<<Where have you been hiding the past few years.>> ...I used to hand over at the Yahoo threads but in the downturn most of the useful knowledge went away and all that was left was noise and some pretty awful attitude. ---> Definitely shows the danger of under-regulation ;-) HPW - I generally stay away from the big boys - the diversification tends to make it hard to tell how they are doing overall - too much stuff to follow. But speaking of HP, I see that A(gilent) is motoring along quite nicely. Got any words of wisdom on those components of old HP?