INQ folks need to learn reading SEC FORM 4

INQ reported that AMD's Chief Sales & Marketing Officer Henri Richard raked in $469,346 by selling 15,010 shares at $31.27, see http://www.theinquirer.net/?article=28891. However, as I review the SEC FORM 4 filing here, it's a different story. This was an option exercise and auto sell transaction. Mr. Richard first bought 18760 shares of AMD at various exercise prices, total cost $260,000. Then he sold 15,010 shares for a net gain of $200,000 in cash and he had 18760-15010 = 3750 more AMD shares under his belt. But keep in mind he has to pay AMT taxes on the 3750 shares he kept, so the $200,000 cash must first be used to pay taxes on the 3750 shares, then pay taxes on the gain from the 15010 shares sold. In the end, the gain is much smaller.

I was wondering why Henri Richard, an insider, could make such transactions on January 3, 2006, right after the end of 4Q05 and before the earnings report. But the fine print in footnote on the Form S4 indicated that this was an automated transaction following "to a Rule 10b5-1 trading plan adopted by the reporting person on August 19, 2005".

Mr. Richard was in fact losing a lot of profit on these transactions, these options has big time value which was lost in the exercise and sale. I guess Henri Richard didn't expect AMD to gain 35% Q/Q growth back in Aug 2005.

Another AMD VP, Thomas McCoy also adopted a similar trading plan.