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Subject:  Re: Additional Funding Requirements Date:  8/23/2002  1:43 PM
Author:  Somewhere Number:  1695 of 10889

Some of the other existing shareholders, by the way, include company management, whose are entitled to exercise most of their stock options at a price of $7.50 per share, i.e, at a price almost 5 and 3/4 times higher than the current share price. Do you think that these individuals are also being unknowingly duped by the diabolical scheme that you are anticipating?

These options didn't cost the management one, single cent. Many companies have been known to "reprice" options if the stock price goes down. Options, historically, only encourage management to hype the stock price long enough for them to sell the stock and get out. Stock options do not align management with shareholders.

If you really want to know management's opinion of the company, check to see how many of them are buying lots of stock on the open market. It might also be useful to note how much stock they've been selling. Something like that says a lot more than the strike price of stock options.

I used to work at a large, well-known company. I got a lot of stock options when I started. And I considered them practically worthless because I knew they would be worthless for a long, long time. But it's not like it cost me anything to get the options, though, so I took them anyhow. Two years later, I left the company and all of the options were still worthless. I was never duped by this "diabolical scheme", but I never lost sleep over it either. I'm certain management was never duped for a minute with getting stock options priced at $7.50/share, but if the alternative was getting nothing, they had absolutely nothing to lose by taking the options.

-- Ryan
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