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From T. Rowe Price's recently-filed 10-K:

"At December 31, 1998, the Company had reserved 36,425,304 shares of its unissued common stock for issuance upon the exercise of stock options..."

Added to the 130 million shares outstanding, this stock option issuance represents 21.8% of the company.

Considering these facts, here's this week's question:

Is management unjustly stealing ownership in the company from shareowners?

Another autographed copy of the Rule Book will go to whichever Fool provides the most insight into this troubling question.

Here's a link to T. Rowe's 10-K:

http://www.freeedgar.com/Search/ViewFilings.asp?CIK=80255&Directory=80255&Year=99&SECIndex=455&Extension=.tst&PathFlag=0&TextFileSize=115704&SFType=&SDFiled=&DateFiled=3/8/99&SourcePage=FilingsResults&UseFrame=1&OEMSource=&FormType=10-K&CompanyName=PRICE+T+ROWE+ASSOCIATES+INC+%2FMD%2F

(Scroll down to page 32, under note 4 for the relevant information.)

-Matt
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Hey everyone,

Elan has won it again with her insightful post on the status of stock options at all ten of our Rule Maker companies. Here's the link to Elan's post:

http://boards.fool.com/Message.asp?id=1030043000714000&sort=postdate

As Elan pointed out, T. Rowe Price has ~22 million issued options. The 36.4 million shares that were referenced in last week's question (#2231) are the number of shares that are authorized for options issuance. I called and confirmed this with Joe Kroto of T. Rowe Price Financial Reporting, who kindly answered my questions. He said that there always needs to be more authorized shares than shares actually granted to make room for each year's grant. So, what this means is that T. Rowe has ~13.8 million authorized shares that have not yet been granted. (That is, 36.4 authorized shares minus 22.6 million granted shares = ~13.8 million authorized shares not yet granted.)

Here's a chart of the actual shares granted for 1995-1997:

1997 1996 1995
3,528,883 2,600,796 3,826,000

So, it looks like there's nothing out of the ordinary with T. Rowe's options practices. If we are to worry about any of our companies options practices, it would have to be Yahoo, Microsoft, and Cisco.

I'm personally still in the process of studying the full implications of options. I expect this will be a topic we address in our nightly report at some point. If anybody has any expertise regarding this issue, I'd love to hear from you.

Congrats again Elan!

-Matt
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Um... last time my wife checked...

Oh, never mind.

Elan
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Um... last time my wife checked...

I always assumed you were a man, and I am glad it need not be me that has to do the checking... ;-)
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