Siebel staff: we'll take cash
Published: 04 Oct 2002 15:48 BST
Siebel Systems' employees have spoken: they'll gladly give up stock options for cold, hard cash.
In a filing with the Securities and Exchange Commission Thursday, the software maker said that roughly 3,400 employees swapped their eligible "underwater" stock options for $1.85 in cash or stock. A stock option is underwater when the strike price is higher than the current value of the stock.
Siebel said in August it would allow employees with options with exercise prices at or above $40 to get $1.85 in cash or stock for every underwater share they own. Chief executive officer Tom Siebel wasn't eligible for the swap.
Employees with option holdings that amount to less than $5,000 got cash. Those workers with options holdings worth more than $5,000 got the payout in stock.
According to Siebel's filing, 1,390 employees elected to exchange an aggregate of about 2,416,000 stock options shares for cash proceeds of about $4.47m. About 2,030 workers swapped 25,616,000 stock options for a little more than 5.3m shares of common stock, worth about $16.9 million net of withholding taxes.
Of the roughly 31.9m shares options eligible to be exchanged, 90 percent of them were swapped for cash or stock. As a result, Siebel will eliminate about 12 percent of its outstanding stock options with an aggregate value of $59m. Siebel will take a charge for its third quarter to cover the exchange.
Shares of Siebel closed at $5.53 on Thursday, well below a 52-week high of $38.38.
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