Company S Stock

Microsoft Corp.'s surprise announcement last week that it plans to replace stock options with restricted stock grants in employee pay packages has revived a debate over how to best link employee compensation to the interests of company shareholders. Stock options have been sharply criticized as an undeserved ticket to vast riches for corporate executives focusing on quick increases in the bottom line. But compensation experts contend that replacing options with handouts of restricted stock is no guarantee that employees' interests will be any more aligned with those of investors.

If it's free, it must be a good deal, right? Not always. Take your employer's stock, for instance. Lots of Americans receive company stock as part or all of the employer's contribution to the 401(k) retirement plan. It's often a lousy deal. At Enron Corp., the Houston energy-trading company that filed for bankruptcy Dec. 2., shares skyrocketed in the late 1990s, hitting $90 a little more than a year ago and making thousands of employees rich, on paper at least. Currently Enron shares are trading at under $1. Those employees aren't likely to recover because shareholders are the last in line when a company's assets are divvied up in bankruptcy court to pay debts.

It was nearly the end of the meeting before the question was asked: What about the stock price? Shares of Ciena Corp. tumbled 18 percent, or $11.81, yesterday to close at $53.31. During morning trading, the stock price hit $51.44 - a 21 percent drop from Friday's closing price. "There are big market factors occurring," Patrick H. Nettles, Ciena's chairman and chief executive officer, said yesterday at the company's annual shareholders meeting in Linthicum. "I think we are seeing the result of investor emotions as much as investor logic."

Manugistics Group Inc. announced a 2-for-1 stock split yesterday, only to see its shares hammered in an uneasy market for technology companies. The Rockville company's shares fell $20, or 15.38 percent, to $110 on the Nasdaq stock market. About 1.7 million shares traded hands, about twice the daily average for the past six months. Other technology stocks suffered, pushing the Standard & Poor's high-technology composite index down more than 93 points to 1,590.67. "It's nothing company specific," analyst Catherine Moore of C. E. Unterberg, Towbin said of Manugistics' slide.

Rockville-based EntreMed Inc., which in April canceled plans to sell 2 million additional shares after investors fled biotechnology stocks, announced plans yesterday to complete a more modest, 1-million-share offering that would net the company about $20.6 million. EntreMed said the proceeds - enough to help carry it "well beyond" a year - would be used to test its experimental protein drugs designed to block the growth of tumor-feeding blood vessels as well as for day-to-day expenses and general corporate purposes.

Sinclair Broadcast Group Inc. had set itself up for a whipping, and yesterday the whipping came.The Cockeysville broadcasting company's stock lost 28.5 percent of its value yesterday, falling $4.1875 to close at $10.50. The steep decline came after Sinclair warned late Tuesday that its new campaign to invest in television-station personnel, programming and promotion would help drag down its financial numbers for the rest of the year.Investors exchanged 11.33 million Sinclair shares, making the stock the 12th most active on U.S. markets yesterday.

DOUGLAS L. Becker, president of Sylvan Learning Systems Inc., made the mistake of checking the company's stock price on a day recently when the market was being ripped apart.What Becker saw was grim. Sylvan's stock had slid to a 52-week low of $18.25 on Oct. 5 -- sliced in half in a little over two months from a high of $36.875."I was just looking at it, shaking my head," Becker said. "That's kind of a stunning decline. I walked into the lobby and it was the same building, the same people, the same product.

Fila Holding SpA yesterday reported that second-quarter earnings increased 127 percent as its sneaker and clothing lines continue to have strong appeal with consumers.The results were announced after U.S. markets closed, but investors had already driven up the company's stock -- up $10.625 to close at $91.25.The company said net income in the quarter ended June 30 was $25.9 million, compared with $11.4 million in the same period a year ago. Revenue rose 58.8 percent, to $322 million from $202 in the comparable quarter last year.

The top three executives at Lockheed Martin Corp. took advantage of a recent spike in the company's stock price to sell shares they held worth more than $40 million, according to filings with the Securities and Exchange Commission.Chairman Daniel M. Tellep, who retired at the end of 1995 as an active employee of Lockheed Martin, made a profit of about $13 million in options-related trading totaling $20.4 million.Tellep, who had been required by company guidelines to own Lockheed Martin stock worth at least five times his base salary, exercised options to buy 280,927 shares May 28-30.

Biospherics Inc., the Beltsville biotechnology company that has developed a sugar substitute, proposed yesterday a 2-for-1 stock split as a way to protect its share price from the jarring volatility it experienced last year."