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Technology Stocks : IATV-ACTV Digital Convergence Software-HyperTV
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To: Tom_H_68 who wrote (8227)12/6/1999 10:13:00 AM
From: gpphantom  Read Replies (1) of 13157
 
<The dilution would only occur when those options are exercised>

If company granted options are in the money, meaning the share price is above the exercise price, then the options are included in the eps calculation as equivalent shares. The fully diluted share number used in an eps calculation include all share equivalents, options, convertible preferred, etc. if the security in question has value.

A company receives the exercise price in cash when an employee exercises his/her options and options are priced at the market share price at the date of the grant.

I agree that options are economically preferable to a company than SAR's. Remember that without "a piece of the action" salaries would be much, much higher and quality management would be harder to attract and retain. Net, net, it's all compensation in a competitive environment! One has to look at the total package.

Good luck
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