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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: IceShark who wrote (46756)	2/12/1999 12:46:00 PM
From: Exacctnt	Read Replies (3) \| Respond to of 132070

IceShark, << I would establish a total option value at grant date and amortize the expense as it vests. You could do a simple model and straight line it over the vesting schedule, or cut the grant into multiple chunks and discretely expense as they vest, etc.>> You've just described how Restricted Stock grants are treated. Restricted Stock grants are not options, they are gifts of stock with a vesting period, usually granted to key employees that provides them with an incentive to remain with the company. Establishing a total option value at the grant date is impossible. As I stated before, at the grant date there is no expense as the employee will pay the company the value of the stock as of the grant price and date. If the company buys stock in the open market at the same time it issues the option, there would be no cost to the company other than carrying cost, after the employee exercises the option and reimburses the company an amount equal to the grant value of the option. Perhaps the only way to avoid raping the shareholders via issuing an excessive number of options would be to require the company to have an equal number of shares in Treasury stock to offset the number of outstanding options. Regards, Bob