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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: FedWatcher who wrote (29502)	5/8/1999 1:13:00 PM
From: w molloy	Read Replies (1) \| Respond to of 152472

Ericy Do you have access to the QCOM option terms? I'll re-itterate a previous post. My option terms (for another SD company) specifically vest my options if I'm laid off, and if the company or division is sold. Indeed, my division was sold off a year or so ago, and my options were fully vested. (Unfortunately the exercise price sucked - buts thats the risk you take) I lose my options if I'm fired for 'cause'. 'cause' is basically actiing in a way detrimental to the company - stealing computers for example. I would be very surprised if the QCOM terms were dissimilar

To: FedWatcher who wrote (29502)	5/8/1999 1:31:00 PM
From: w molloy	Respond to of 152472

Fortune Magazine : Stock-Option Magic at Microsoft July 7, 1997 pathfinder.com When Microsoft went public in 1986, it wasn't because the business needed money--the 11-year-old software company was already a cash machine. No, Microsoft had to go public so employees could cash in all the stock and stock options they'd been accumulating. Cash in they have. Options have been at the heart of Microsoft's compensation system, and its finances, ever since. In the first three months of this year, employees realized an estimated $730 million in profits from their stock options. That's $32,000 per employee. What about unexercised options gains? Another $23 billion was outstanding as of March 31, or $1 million per employee. Neither total reflects the multibillion-dollar holdings of CEO Bill Gates or executive vice president Steve Ballmer, since neither takes options. The options bonanza costs nothing on Microsoft's income statement, as reckoned by current accounting standards. Which is why conventional profit-and-loss calculations don't come close to reflecting the economic reality of a company like Microsoft. Start by looking at the company's reported earnings for the first quarter of 1997: $1.042 billion. Obviously, if Microsoft suddenly had to pay employees in cash the $730 million they made exercising options, the earnings would be 70% lower--and the stock would be in a shambles. There's a more subtle effect as well. The IRS allows businesses to treat employees' options gains as if they are paid in cash; in this case, employees' first-quarter gains led to a $256 million tax savings that increased Microsoft's reported earnings by 25%. The millions of shares employees acquired with their options had to come from somewhere. To avoid diluting existing shareholders by issuing new shares, Microsoft continually buys back stock from investors. Buybacks cost $1.951 billion in the first quarter. Such spending drains Microsoft's cash hoard--but doesn't appear as an expense on the income statement. What about the unexercised options? They don't show up as a liability on the balance sheet, although they surely are if the company plans to keep doing buybacks. With $23 billion in options outstanding, that's something Microsoft executives have been playing up in meetings with analysts and investors in an effort to persuade them that the $9 billion the company is holding in cash and short-term investments is not excessive. Put all these pieces together, and it's clear that reported earnings alone don't tell the whole story. But don't expect things to change anytime soon. The standard-setters for the accounting profession tried for years to find a better way to account for employee stock options. They've essentially given up.