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Technology Stocks : THREE FIVE SYSTEM (TFS) - up from here? -- Ignore unavailable to you. Want to Upgrade?

To: raefon who wrote (1197)	4/1/1998 11:51:00 PM
From: Noblesse Oblige	Read Replies (2) \| Respond to of 3247

Hi Raefon... You have noted: "Thought "the Thread" participants might like to understand more completely the reason for David Buchanan receiving another 50,000 warrants. This comes from page 10 of the proxy statement, fourth paragraph. "The Senior Committee noted that stock options issued to Mr. Buchanan in 1994 were due to expire in 1997. The Senior Committee therefore authorized the issuance of new stock options to Mr. Buchanan during 1997 in the amount of of 50,000 shares" Hmmm...Guess what the closing price was 12/30/94? $36 3/8. I could not find the 1994 proxy but the options should have been based on the closing price 12/30/94. Guess what the new strike price is on the options? $12.75. If the last options had a three year expiration, shouldn't the replacement options have a three year term? Surprise, they have a 10 year term (4/24/07). Noblesse how can they extend the term if they are replacement options? I am trying to find the 1994 proxy information to identify the exact strike price. Anyone have the info? I could not find the info at the Edgar site." ______________________________________________________________________ I am sorry, Raefon, but I do not have annual reports that go back that far on the premises. I could call TFS and ask them to send me one, but I am assuming that it is unlikely I would get it prior to the annual meeting. :-) As for the import of the underlying material in your question... It would appear that Mr. Buchanan has had the opportunity to replace higher strike options with lower strike options. This ability comes without risk, and has been done under an option program authorized by the Board, and (though it pains me to say it) approved by the shareholders. Anyway, it appears to me that Mr. Buchanan was given a 50,000 share "motivational" option at a time when the shares were trading at approximately double the current price. So, the shareholders have collectively lost half their money, and, he has the "reward" of potentially extra compensation from a lowering of the strike price of the option. So...let's see if we can follow this. If TFS shares had gone up from the initial option award, he would have made a barrel of money. The stock went down, however. So, now that new, lower priced options have been issued, not only hasn't he lost money on the deal, but he may very well make more? Do I have that right, Raefon? What is particularly galling about this, of course, is that it is done "in your face" style to shareholders that have collectively suffered for an entire market cycle. Interesting, no? Do you think the company can arrange for all of the present shareholders to have a similar right? As for your question regarding the extension of the options term, Raefon, I found that particularly amusing. I am not an attorney, so I can't speak for the "legalisms" involved, but it appears awfully strange to me that the shortly retiring Mr. Buchanan has been given options that will be exercisable ten years into the future. Wow. You think TFS would hire me? Have a good evening.