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  • mlledaae_2000 mlledaae_2000 Jan 11, 2000 8:04 PM Flag


    Why do you consider it okay that Castellini can
    exercise his Nov. 1999 options at the Nov. market price
    rather than at $44 or$50? These options run for 10 years
    and even with the abysmal performance of BD stock it
    should over a decade double- why not have his exercise
    price at $44 or$50,the range the stock traded in in
    1998 before credibility problems were caused with Wall
    Street ?

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    • I did not make myself clear. Option strike price
      is set at market on the day of the grant to comply
      with the IRS.
      For BDX to double within 10 years
      would require an annual compound growth rate of
      which based on past performance and the forseeable
      future is doubtful.
      The bigger question is why has
      Castellini decided to remain as Chairman, when he was to
      have "retired"? Remember that he had retired in the
      past, but only returned after a few weeks because
      Gilmartin left with only two to three weeks notice to take
      the Merck Chairmanship.
      Gilmartin needed an
      insider to succeed him, in order not to make it look like
      he left BD high and dry. Gilmartin had just
      restructed the company and he left. Castellini took over and
      changed the structure again. Just look at the old annual
      reports and you will see what I mean.
      Ludwig has a
      hugh hole to climb out from. Time will tell if he can
      do it.
      I am still betting that after two years
      they will try to sell BDX in order to recover a quick
      premium on their options. The big boys , and management,
      have lost significant amounts on the worth of their
      options. They will look for the quick fix, which means to
      sell the company

      • 1 Reply to batman53_reliable
      • There is no IRS requirement that the option
        exercise price has to be the market value on the day of
        grant. The only tax requirement is that incentive
        options (which the Castellini options are not ) must have
        an exercise price at least equal to market value.All
        options, incentive and nonqualified, can be granted with
        an exercise price higher than current market value.
        This however is not the point to quibble about. The
        outrage is the fact that Castellini was granted 100,000
        shares in Nov. at all. Grants are made once annually and
        he had already gotten a grant of 195,000 shares in
        Jan. As said earlier and your message agrees withs
        this, why is he staying as Chairman? From a substantive
        as well as a cosmetic standpoint,this is a major
        negative for BD and is one of the points that should be
        made by shareholders at the Feb. 8th annual meeting.

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