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Technology Stocks : Intel Corporation (INTC)
INTC 36.82+1.5%Dec 19 9:30 AM EST
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To: Dave Budde who wrote (172762)1/31/2003 2:54:58 AM
From: The Duke of URL©  Read Replies (1) of 186894
 
Now I understand. But the value of an option to buy a stock for 25 that is trading at 50 is exactly 25 at the moment it it issued, assuming no restrictions on its exercise.

This is section 83 of the internal revenue code and it governs non-qualified options.

It appears, I don't know if it is disclosed, that Pottrucks options were NOT fair market value at the time they were issued to him because the stock did not trade below 50 in the year his were granted.

Because of this fact, the actual terms surronding this grant is one of Carl's questions.

Near as I could extrapolate backwards, the option was issued at a execise price of ~25 when the stock was trading at ~50 multiplied by a split-adjusted 18,750 shares or a value of ~500K or 125k a year for four years.
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