Seems like a good way to reduce the total number of fully diluted shares, and motivate employees. There will be a cash charge as the new stock vests though...
InfoSpace Announces Employee Option Exchange Program
BELLEVUE, Wash., Oct 29, 2001 (BUSINESS WIRE) -- InfoSpace, Inc. (Nasdaq:INSP), a provider of wireless and Internet software and application services, today announced an option exchange program that is intended to reduce the total number of outstanding stock options and provide a more meaningful form of equity compensation for retaining and motivating employees.
InfoSpace will offer eligible employees the opportunity to exchange outstanding unexercised options from the Feb. 6, 2001, special option grant program under the InfoSpace, Inc. Restated 1996 Flexible Stock Incentive Plan and the InfoSpace, Inc. 2001 Option Plan, and option grants made to new employees hired after Feb. 6, 2001, with a per share exercise price equal to or greater than $3.00. For every four eligible option shares surrendered, the exchange allows participating employees to receive one share of restricted stock that will vest quarterly over the next two years. In connection with the exchange, Participating Eligible Employees also will be required to surrender all of their other outstanding options with exercise prices equal to or greater than $3.00 per share.
If all eligible employees participate, shares subject to outstanding employee stock options and awards would be reduced by approximately 50 million shares. Additionally, InfoSpace has reserved approximately 8 million shares of restricted stock which, if the exchange offer is completed, will be used to make discretionary supplemental grants to certain employees that participate in the exchange or are not eligible to participate. InfoSpace may choose not to complete the exchange offer if the options tendered in the exchange represent less than 95% of the outstanding shares subject to eligible options.
"The foundation of InfoSpace's success has always been its team of employees. Motivating and retaining our employees is critical to our long-term success," said Ed Belsheim, president and chief operating officer of InfoSpace.
InfoSpace will record an expense on the date of grant based on the restricted stock's value. This will be expensed as a compensation expense as the restricted stock vests. Eligible options that are not exchanged in this offer may be treated as variable awards for accounting purposes. |
