David,
<<I believe that vested, in-the-money options are already included in fully diluted shares/outstanding and PR, PS that are stated on that basis. That may be true of vested, not-in-the-money grants too.>>
This is not correct. FAS 128, which governs EPS disclosures, takes no account of vesting, and accounts fully for all in-the-money grants, whether vested or not. It also ignores vested not-in-the-money grants.(Except that you are supposed to disclose how many out-of-the-money grants there are - but a lot of companies haven't done this, as FAS 128 is new and they haven't got the hang of it yet <G>).
FAS 123, which requires companies to disclose the "fair value" of the options granted, and to disclose a pro forma expense hit, does consider vesting in figuring out the period over which the expense should be amortized as well as compensating for grants that don't ever vest.
Peter |
