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To: Greg h2o who wrote (34709)	8/7/2001 9:43:58 AM
From: James Calladine	of 42804

<<<Slowing Internet usage to cause U.S. switch/router markets to fall by 11% in 2001 By Semiconductor Business News Aug 6, 2001 (10:34 AM) URL: siliconstrategies.com SOUTH SAN FRANCISCO, Calif. - The de-acceleration of the Internet and other factors will cause the North American market for switching and routing equipment to decline by 11% this year, from $7.8 billion in 2000 to $6.9 billion in 2001, according to a new report from RHK Inc. here today. The decline in these communications-equipment markets can also be blamed on service provider bankruptcies and consolidation, reduced spending among the carriers, and over production by system vendors, according to RHK, a market research firm based in South San Francisco. The forecast includes shipments for core IP (Internet Protocol) routers and ATM multi-service switches, edge IP aggregation routers, session management systems, and service creation systems. "Another contributor to the decline is the decreased rate of growth in Internet traffic," said Rosalyn Roseboro, who tracks the switching and routing market for RHK. "While the amount of Internet traffic continues to grow, the rate of growth has slowed down, leaving newly installed equipment underutilized." Over the next 12-18 months, RHK expects this excess capacity to be absorbed. Driven by demand for high-speed access, the North American switching and routing market will return to modest growth in 2002, according to RHK. There are other positive signs. "One bright spot in the midst of this economic shift is the growth we see with edge IP aggregation routers," Roseboro said. "We find that growth in IP aggregation routers is closely correlated to the growth in demand for higher-speed access," she said. "Additionally, these routers will be used to deliver value-added services, such as IP-VPNs." Namaste! Jim

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To: Renee Scherb who started this subject	8/7/2001 10:52:19 AM
From: James Calladine	of 42804

SPINOFFS: CS (posted previously?) <<Enterasys Does the One-Step By Ari Weinberg Aug 03 2001 04:00 PM PDT The networking company is taking a backdoor approach to becoming publicly traded – no IPO. -------------------------------------------------------------------------------- Enterasys Networks finally starts trading on the New York Stock Exchange on Monday. And like all newly listed companies, the New England-based networking firm has jumped through all the usual hoops: filing with the Securities and Exchange Commission, going around the country to drum up investors and applying for a stock exchange ticker. Enterasys is missing just one thing: an initial public offering. Like media software firm Roxio, Enterasys is taking a backdoor approach to becoming a publicly traded company. Faced with a volatile and unfriendly IPO market, companies that are looking to spin off business units have had to rethink their strategies. Some, such as Credit Suisse First Boston, simply plan to reabsorb companies that they sold on the public market. Others such as Qualcomm simply scrubbed their spinoff plans. The value of those units will be reflected in the price of the parent company's shares. Others went ahead with IPOs but accepted far less than they originally expected. A notable example was Lucent's spinoff of Agere Systems, which priced well below the parent's hopes. Enterasys, owned by Cabletron Systems, doesn't have to worry about pricing, first-day pops and banking fees. Better yet, it was set to go public with all of its shareholders firmly in place. They are both examples of a "one-step spinoff." In a one-step spinoff, the parent company issues shares as part of dividends to holders of the parent company's shares. Shares of the parent and the spinoff then trade on the "when-issued" market, a sort of ghost market where shares of companies without publicly traded shares trade. (This sort of market also exists for bonds and is instrumental in maintaining the price of government debt ahead of bond auctions.) The when-issued shares are traded from the record date of the dividend to the payment date. When the payment date hits, voila, a brand-new public company. The saga of Cabletron Systems and its spinoffs has been particularly intriguing. The data-communications-equipment and software company has successfully fought an uphill battle to pull the company from dire financial straits in late 1998. The plan, engineered by CEO and Chairman Piyush Patel, was to split up what had been become a mishmash of networking operations. "There were three objectives," Patel said. "Reignite growth, energize employees and fuel profitability." Cabletron started that process in February, raising $120 million for switch-router maker Riverstone Networks. The next step comes Monday, when Enterasys begins trading as ETS on the New York Stock Exchange. Enteraysy will spin off network-management-software maker Aprisma later in the year. A fourth, smaller business unit, Global Network Technology Services, is being sold off, and parts of it have been distributed to Enterasys and Aprisma. The flipside of this is that the parent company, Cabletron, will disappear Monday. Its shareholders will receive one share of Enterasys and 0.51 share of Riverstone for each share of Cabletron they hold. Had the conditions been more favorable, Cabletron would have gone for the traditional two-step spinoff – an IPO followed by a divestment of the parents holdings in the spinoff, Patel said. Fortunately for Riverstone and Enterasys, the firms receive their portion of Cabletron's cash in the spinoff. But further off in the distance, Patel believes that Enterasys can raise cash in a "more efficient" secondary public offering. Still, Enterasys has used the past few weeks to make sure its current investors – Cabletron shareholders – back them up. "Our roadshow had the marketing aspects of an IPO," said Enterasys VP Tom Eggemeier. The one-step spinoff gives Enterasys something it hasn't had but needs: a currency for acquisitions. Vice Chairman Ernie Riddle says public currency will allow the company to be more nimble than major competitors Cisco and Nortel. Enterasys isn't alone in using this strategy. In early May, network storage company Adaptec spun off Roxio, a software maker it had housed. The deal has a slightly different feel, in part because Adaptec still exists. "The unit's true value wasn't being recognized by the Street," said Adaptec CFO David Young. Roxio filed and then withdrew its S-1 – the official SEC document for an IPO – after the firm's bank, Morgan Stanley, recommended pulling the offering in late December due to a sour IPO market. When Adaptec officially severed ties with Roxio, Adaptec shareholders received 0.1646 shares of Roxio per Adaptec share. The downside of a one-step spinoff is that the companies raise no cash. But neither Enterasys nor Roxio need money. And in the current market, there is a very real chance the companies would leave money on the table if they went with the two-step IPO. "When you are not trying to raise money, there's a whole different set of decisions," said IPO.com CEO Marc Baum. "Some companies are just trying to get their assets fully valued by the market." The one-step spinoff, says Baum, is shareholder- and company-specific and allows for a smoother spin off. It removes the one part of the process the company can't control: the market's pricing of its companies. thestandard.com >>> Namaste! Jim

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To: delmarbill who wrote (34713)	8/7/2001 12:54:34 PM
From: James Calladine	of 42804

NOAM STARS! (SEE SECOND GROUP) <<<Table of Computer, Software CEO Pay Standouts: Graef Crystal By Graef Crystal Las Vegas, Aug. 7 (Bloomberg) -- The following table shows 23 U.S. chief executives in the computer and software industries who, after taking account of differences in company size, earned more than 100 percent above industry averages during 2000. Another table shows the seven industry CEOs who turned out to be the lowest paid. Explanations of the numbers in each column are available below. HIGHEST PAID Options Over/ Total Pay & Stock Under Company Name ($000s) ($000s) PPR Paid Tibco Software Vivek Ranadive $86,568 $85,728 58 2890% Inktomi David Peterschmidt 79,246 78,527 73 2838 Apple Computer Steven Jobs 578,651 488,651 10 2466 Siebel Systems Thomas Siebel 227,468 224,965 82 2347 Oracle Lawrence Ellison 154,348 154,140 99 494 Adobe Systems John Warnock 41,387 29,265 84 448 Mercury Interactive Amnon Landan 17,057 15,977 83 424 Network Appliance Daniel Warmenhoven 22,613 21,867 99 376 Conexant Systems Dwight Decker 48,005 46,278 25 370 Synopsys Aart de Geus 25,362 24,330 9 346 Lattice Semiconductor Cyrus Tsui 20,910 16,976 51 346 JDS Uniphase Kevin Kalkhoven 34,560 33,822 98 325 Juniper Networks Scott Kriens 21,426 21,062 91 313 Avant Gerald Hsu 12,600 8,594 76 253 Maxim Integrated Products John Gifford 19,742 19,442 73 228 Cisco Systems John Chambers 120,086 118,761 78 219 RSA Security Arthur Coviello 9,625 9,015 45 212 Vitesse Semiconductor Louis Tomasetta 12,413 11,731 79 207 Fairchild Semiconductor Kirk Pond 27,248 25,356 31 194 Yahoo Timothy Koogle 17,126 16,815 13 145 Vignette Gregory Peters 8,597 8,320 22 138 Symbol Technologies Tomo Razmilovic 18,941 16,886 55 131 At Home George Bell 9,897 9,462 12 101 LOWEST PAID Options Over/ Total Pay & Stock Under Company Name ($000s) ($000s) PPR Paid Atmel George Perlegos $525 $0 53 -95% Foundry Networks Bobby Johnson 140 0 12 -96 MRV Communications Noam Lotan 100 0 27 -97 IDT Howard Jonas 202 0 65 -97 Broadcom Henry Nicholas 110 0 40 -98 Microsoft William Gates 639 0 8 -98 Sapient Jerry Greenberg 51 0 16 -99 ``Total Pay'' consists of base salary and annual bonus; value of free shares of stock on the date they were granted; estimated present value of stock options on the grant date; payouts from incentive plans; and pay classified under the categories ``Other Annual Compensation'' or ``All Other Compensation'' in proxy statements. Gains resulting from the exercise of stock options during the study year aren't counted. ``Options & Stock'' breaks out the value of free shares and the estimated present value of option grants made during the year, as calculated by Bloomberg News. ``PPR'' stands for ``performance percentage rank.'' This is based on a comparison of each company's total shareholder return in the year under study with the return on a broad market index: the Nasdaq Composite for technology companies and the Standard & Poor's 500 for others. Rankings range between zero and 100. ``Over/Under Paid'' is the percentage by which total pay is higher, or lower, than what an average-paying company with the same dollar amount of sales -- or the same sales and total shareholder returns, if the latter is statistically significant -- would give to its CEO. This hypothetical amount is determined through regression analysis, a statistical method which shows the relationship, if any, between pay and such factors as company size and stock performance. For more statistics on CEO pay, go to ecomp-online.com, the source of proxy statement information for this study. For a detailed explanation of the study's method, see the story headlined ``Methodology for Studying U.S. Executives' Pay'' under NI CRYSTAL. >>> Namaste! Jim

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To: Greg h2o who wrote (34715)	8/7/2001 1:36:21 PM
From: bob zagorin	of 42804

Top Of The News: Productivity Pop Portends Growth Dan Ackman, Forbes.com, 08.07.01, 10:30 AM ET NEW YORK - Doomsayers got another shot in the solar plexus this morning as the Bureau of Labor Statistics reported sharp gains in productivity in the second quarter. Preliminary productivity data--a measure of output per hour of work--rose by 2.8%. This rise reverses the productivity stagnation of the first quarter, when productivity grew by a 0.1% growth rate, according to revised figures. (Previously, the bureau had reported that productivity actually fell in the first quarter.) IMHO this is significant. Back in October, when BW predicted a techology depression, they said the slowdown would be worse than expected because the fed would misjudge the situation and refuse to lower rates and, then, as things got worse, productivity would fall creating a downward spiral. well the fed did lower rates and productivity is doing o.k.

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