Options Talk Hits Juniper, F5

Gelblum says Motorola doesn't seem to indicate a high possibility for manipulation, since it issued grants on the first Monday of May for three of the four years that happened to be the stock's low. But Juniper and F5 may have a harder time explaining their practices.

At networking switch maker F5, six out of the 10 options granted to executives since 1998 were dated when the stock was at its lowest level in a month. F5 representatives didn't return calls or an email seeking comment.

Six out of 15 grants to executives at Internet gearmaker Juniper occurred on exactly the lowest day for the stock in each given month, says Gelblum, who declined to offer an opinion on the transactions.

A Juniper representative said it was too early to comment. "We need to go back to figure out why those grants were given on a particular day, and we are in the process of doing that," the rep said.

Observers say ideally, option granting dates should be arbitrary and have no consistent relationship to the highs and lows of the stock price. Or better yet, grants could be dated at the same time each year to avoid any impression of favorable timing.

Executives and compensation committees that arrange for the option to have the best date effectively add millions of dollars of value of the stock should the price go up. It's an unfair advantage, say investors.

"If these dudes were timing, that is simply wrong and immoral," says one New York money manager. "If their board of directors let them -- then that is simply ridiculous and a major breach of fiduciary duty."

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