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Technology Stocks : S3 (A LONGER TERM PERSPECTIVE) -- Ignore unavailable to you. Want to Upgrade?

To: bob yahnke who wrote (7046)	10/30/1997 1:33:00 PM
From: Bill Lin	Read Replies (1) \| Respond to of 14577

Bob, variable option pricing may or may not be an appropriate way of running an option plan. Your method (lowering strike prices when price increases, increasing strike prices when price declines) WILL make people feel worse. S3 as almost all other Silicon Valley companies, have ESPP programs which allow members to buy S3 stock at 85% of market value based upon the LOWEST price of the beginning or end of the quarter. This is standard, and a good way to match employee incentives with shareholder incentives. (and a GREAT example of effective agency theory) to reprice 2.7 million options down to $10.06 is TOO much. the subordinated debt holders are ok, because they have 5.75% interest on their bonds. (strike at $19.22). the secondary offering at $12+ is underwater. so shareholders have been VERY patient. hey, i gotta stop. i'm just complaining again, which is not informational or value added. when you buy a fallen angel, there SHOULD be lots of complaints. its the forward looking actions, however, which will make a high flying angel. BL