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Ballmer grants options to lift employees' spirits

In an attempt to rally employees reeling from breakup rumors and a sagging stock price, Microsoft's chief executive grants workers new stock options priced near the company's 52-week low.

    In an attempt to rally employees reeling from breakup rumors and a sagging stock price, Microsoft's chief executive granted workers new stock options priced near the company's 52-week low.

    Steve Ballmer sent the news in an email obtained by CNET News.com to more than 30,000 Microsoft employees today. Amid the recent news swirling around the software giant, Ballmer's electronic speech was clearly designed to bolster morale that, according to several insiders, has reached new lows in recent weeks.

    Adding to a barrage of incentives, Ballmer said all employees would receive a one-time stock option grant equal to options received with their July 1999 review. New employees also are eligible for a grant.

    Options would be priced at yesterday's closing price of $66.63. Ballmer also promised additional rewards "to those who show the strongest leadership and technical potential."

    "We know stock options are an important part of our compensation," Ballmer wrote in the email. "I think the grants since July will have value long run, but I want to preempt undue concerns by awarding these new grants that will let people see returns much sooner."

    Microsoft stock has hit new lows amid rumors that the software company could be split into two separate operating units. Yesterday, shares fell more than 15 percent following a series of analyst downgrades.

    "I am extremely bullish about Microsoft's future," Ballmer wrote. He also said that Next Generation Windows Services (NGWS), to be revealed at Forum 2000 later this spring, will create the company's "winning strategy for the future."

    Ballmer tried to reassure employees that despite talk that the Justice Department is working on a proposal to split the company, this would not be the final outcome of the landmark antitrust case.

    "This company, which has done so many great things for consumers and for the American economy over the last 25 years, will not be broken up," Ballmer wrote. "No matter what the newspaper headlines say, absolutely nothing in the current case justifies breaking us up."

    Government lawyers could make their remedy proposal--what to do about Microsoft's antitrust violations--any time this week. Earlier today, Assistant Attorney General Joel Klein briefed the White House on the remedy proposal at the request of the Clinton administration.

    Ballmer, who has said in the past that Microsoft will appeal a final verdict in the case if it is unsatisfactory, wrote that employees should have confidence in the company's legal stance.

    "We have won at the Court of Appeals before, and Bill (Gates) and I are confident in our legal position as we move forward."