The net effect: It took in $365 million from the exercise of options.
The court-ordered exercise of options could harm an executive in a couple of ways, says James M. Crawford Jr., a benefits attorney in Davis, Calif.
Reckitt Benckiser, the Anglo-Dutch consumer goods group, eased 7p to £12.73 after chief executive Bart Becht sold 625,000 shares at £12.80 following the exercise of options.
It also showed that he acquired the 500,000 shares after the exercise of options and had not sold any other stock in the San Jose, Calif., company the last three months.
A few even received permission to change the exercise price on their stock options or to use an accounting maneuver to cancel an earlier exercise of options that, in hindsight, looked financially foolish.
The Securities and Exchange Commission is investigating whether employee stock option grants were backdated or granted ahead of favorable news to give the recipients a better chance of profiting from the exercise of options.
Microsoft and Salomon Smith Barney, which is now part of Citigroup, maintain that there was no conflict of interest because their contract extended only to the exercise of options and employees were free to approach any firm for financial advice.
It allowed executives to accelerate their exercise of options as soon as shareholders approved its merger with WorldCom, even though many thought -- correctly -- that the merger would be blocked on antitrust grounds.
The company did not say why Dr. Waksal had borrowed, though it appears to be at least in part to pay taxes on the gains he made earlier in the year from the exercise of options and the sale of stock to Bristol-Myers.
Cashless exercise of options.
This permits the follower to conclude the leader's individual information through noticed exercise of options.
