It is a matter of fact in the public record, which records the following:
On 2/3/02 e.Digital announced that it had, as of that day, applied for a listing on the NASDAQ exchange. Robert Putnam was quoted as saying: "We believe we meet all the current requirements for a NASDAQ listing", said Robert Putnam, Senior Vice President. "The listing process and the timing of our planned listing will be determined by NASDAQ."
On that SAME day (2/3/00):
FF exercised 8 cent options for 482,000 shares. He sold 246,000 (51%) of those shares on the open market on 2/3 and 2/4/00 netting approximately $3 million in gains.
On 2/3/00 RP exercised 8 cent options for 250,000 shares. He sold 125,000 (50%) of those shares on the open market on 2/3/00.
RW exercised 8-10 cent options for 100,000 shares. She sold 100,000 (100%) of those shares on the open market on 2/3 and 2/4/00..
The fact is that by selling their shares prior to the one-year holding period, these executives incurred income taxes on their gains at the highest personal income tax rates.
Both FF and RP had exercised options in the summer of 1999 that they could have sold in the summer of 2000 and incurred only the maximum 20% long-term gains tax on their gain and still cashed out long before the AMT on the Feb. 00 option exercise would have been due.
IMO, that they chose to incur an approx. 30% higher income tax by selling the options they had just exercised instead of waiting until summer to sell the options they exercised in 1999 for a 20% LTG tax is evidence that they believed the share price would be substantially less by the summer.
AI
