Tech Trader Daily found out that VMware today disclosed in an SEC filing that it plans to offer employees a chance to swap their post-IPO, “underwater” stock options for an equal number of options with an exercise price equal to the share price on the day immediately following the data the exchange is finished. Got that?
Non-U.S. employees will be granted a “to-be-determined proportionate number of restricted stock units after the exchange offer for U.S. employees is completed,” president and CEO Paul Maritz wrote in an e-mail to employees.
U.S. employees will get the same number of options – but at a price based on the close of the stock the day after the exchange is completed. In addition, the clock on the options vesting schedule will start over. The exchange is voluntary and company executives are not eligible.
John DiFucci, software analyst with J.P. Morgan apparently said this: “[This is more of] an effort to abate a brain drain from the company… While we consider this a modest positive for the stock, we also note that it acts to slightly dilute current shareholders.”
VMW, which rose $1.94 in the regular session, is off 28 cents, or 0.7%, to $38.61, in after hours trading.