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Technology Stocks : Intel Corporation (INTC)
INTC 36.38-1.3%Dec 22 3:59 PM EST
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To: Amy J who wrote (172827)2/5/2003 10:13:31 AM
From: GVTucker  Read Replies (2) of 186894
 
Amy, RE: I'm curious why not reprice? What would be the estimated charge?

I imagine it would be a nightmare to reprice for a large company due to different annual grant prices?

I believe that the charge would be the difference in cash that would be coming into the company coffers. For example, if the original option was for 100 shares at a strike of $10, and the option was repriced to $3, the charge would be $1,000 - $300, or $700. You don't see this too much in public companies, so I'm not positive on this one.

It actually isn't much of a nightmare at all. It's a pretty straightforward calculation.

Why would a repricing be a charge to earnings? I thought options weren't a charge? Or, is it only a repricing that is a charge to earnings? If so, why?

It's the repricing thing, not the option thing, that necessitates a charge. And there is a charge because that's what the rules say.
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