Elizabeth -
Yes.
Let me try a hypothetical example, hopefully not adding too much to the confusion.
As Vice President in charge of office supplies, I was granted an option for 100 shares on June 30, 1995. The option exercise price was $15, and the option would be eligible for exercise after 3 years, starting on July 1, 1998, and would expire after 10 years, on June 30, 2005.
At any time within the 7 year period between July 1, 1998 and June 30, 2005, I am entitled to buy 100 shares at a price of $15 per share and am free to either sell the 100 shares immediately or hold them for later sale.
If the stock is below $15, the option has no current value to me, as I can buy stock cheaper on the open market.
If the stock is above $15, say at $32, I can exercise the option for $15 and immediately sell the stock for $32, netting a profit of $17. It would make sense to do this only if I expect to never have the chance again to get a $32 or higher sale price before my option expires, or if I need the money immediately. Tax considerations, potential termination of employment, or other specific details are ignored here.
Since I am entitled to exercise my option within the 60 day period following December 23, 1999, and the stock price is above my exercise price of $15, my potential 100 shares MUST be included in the count of executive shares provided in the SEC filing of 12/21/99. It is clear that I will NOT do so, as my option still has 5 years to run and the stock WILL rise 100's of percent in that time. -g-
Regards, Don |
