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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Larry Brubaker who wrote (30791)	2/18/2002 8:47:49 PM
From: Boca_PETE	Respond to of 99280

Larry Brubaker - re:("they simply re-price the options downward, diluting the stock even more") Agreed that option re-pricing had been a common practice into 1998. But under FASB Interpretation 44 effective July 1998, option re-pricing can trigger a conversion of the option that could require the applicable company to record stock option compensation expense based on changes in the market price of the company stock. So called "Fixed Options" do not require booking of stock option compensation expense, but "Variable Stock Options" do require booking of related stock option compensation expense. It's all set out in Interpretation 44. I think any company contemplating re-pricing their outstanding stock options will need to tread very carefully through this dangerous minefield. P