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To: Jeffrey S. Mitchell who wrote (737)	2/5/1999 9:30:00 AM
From: Mason Barge	Read Replies (1) \| Respond to of 770

Jeff - Thank you a lot for the helpful post on the options. Here's my question, if you (or someone) knows the answer. The exercise price of these options ranges from $3 to over $8. If these have not been exercised and are still "options", why would they impact the merger? It's not like someone is going to exercise an option at $3.50 to get $3.25 worth of ALYD stock. And if they are not exercisable (in the sense of conveying no economic benefit to the holders by exercising them), why would they be counted as "shares" for the purpose of the buyout? The SEC now requires that they be counted as "diluted" shares under many circumstances, but if their value is lower than the price, then I can't see any mechanism by which they would qualify for purchase by ALYD. On the other hand, if they have been exercise in the past, why would they not appear as issued shares?