Senior Lumenis execs unlikely to exercise options after shares eroded 55% - TheStreet

After dropping 55% since the beginning of this month, medical and cosmetic laser-maker Lumenis (Nasdaq:LUME) is trading at $3.8. In this light, it is interesting to discover what happened to the options granted directors and senior executives. Chairman Jacob Frenkel, former governor of the Bank of Israel, CEO Yacha Sutton, and former COO Sagi Genger received 1.3 million options in 2001. At the present share price, and given the loss of investor confidence, exercising the options is not a likely prospect.

Frenkel received 500,000 options at a $5.06 exercise price in 2000. At the time, the share price was $32, and the options were worth over $16 million. In 2001, Frenkel received another 300,000 options at $10.9 exercise price. Today, the entire bloc is out-of-the-money. In addition, Frenkel owns 781,000 shares, 2.12% of share capital. He sold shares last July for $1 million.

In 2001, Sutton received 550,000 options, of which 380,000 options at $10.9 exercise price. Some 100,000 options matured in May 2001. Another 120,000 options are at $16.56 exercise price, some of which were vested this February. The remaining options are at $24.9 exercise price. Sutton will get the options if his employment contract is extended at the end of the year. Today Sutton owns 500,000 shares, 1.35% of share capital. He sold shares for $4.3 million as of the beginning of 2001.

Genger received 440,000 options, of which 300,000 options are at $10.9 exercise price, the remainder at $16.56 and $24.9 exercise price. He exercised shares for $2.3 million in 2001, and today owns 300,000 shares.

Major shareholder Coherent (Nasdaq:COHR) received 16.4% of shares when Lumenis acquired Coherent's medical laser division in April 2001. The U.S. Securities and Exchange Commission eyed Lumenis's write offs and one-time charges related to the acquisition. Coherent owns 5.5 million Lumenis shares, 15% of share capital.

In February 2001, Sutton dismissed rumors that some of the remaining short balance, which at the time came to 7 million shares, originated in Coherent.