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+--- Thread: Talk about a bad option trade (/showthread.php?tid=4164)
Talk about a bad option trade - Gator - 07-13-2013
Christian Vinson had 100,000 options expire (or taken away) with a $52.76 strike price.
| 2013-07-11 | 52 - Expiration of options | -100,000 | 52.7600 |
RE: Talk about a bad option trade - arthurbell - 07-16-2013
'Gator' pid='25682' datel Wrote:Christian Vinson had 100,000 options expire (or taken away) with a $52.76 strike price.
2013-07-11 52 - Expiration of options -100,000 52.7600
I have been mulling this option trade or non-trade. It appears to me that these options were worth about 2 million $. Why on earth would he not exercise them? After spending a long frustrating hour trying to figure out the sedi.com website they expired on June 30 I can now see. Is there a blackout period that he could not sell if he exercised? When the Exxon selldown is annouced those might have been worth 5 million $ or more! Why not sell and then exercise to settle the trade and thus not need the 5 million $. Nobody would care about a sale as he was retiring anyhow.
RE: Talk about a bad option trade - bam - 07-17-2013
maybe he didn't have the cash and the company didn't want to get into how it would look if they lent him the money on the way out the door. And no bank would lend to you to purchase options.
RE: Talk about a bad option trade - Gator - 07-17-2013
Maybe his departure was not voluntary.
RE: Talk about a bad option trade - MRP - 07-17-2013
Below is from the management circular this year:
"A detailed review of the compensation paid to the Named Executive Officers, employing the services of the Hay Group to help benchmark against relevant peers and practices, was last concluded in 2010.
…
As part of that review and process, a stock option grant was made to Executive Vice President Corporate Development & Government Relations in June 2010, on terms and conditions corresponding to the grant of the stock options made to the Chief Executive Officer at that time, including occurrence of a positive final investment decision in the Corporation’s LNG project as described above."
Below are the terms of Mulacek’s options grant which are the same as Vinson's per the above:
"Vesting under the terms of the stock options granted to the Chief Executive Officer in 2010 is conditional upon the occurrence of a positive final investment decision in the Corporation’s LNG project involving the development of gas liquefaction facilities to allow for the export and sale of liquid natural gas, when all licences, permits, approvals, contracts, financings, and design work have been completed and by which all relevant parties have formally approved the implementation of our LNG project. Vesting was also conditional upon continuing employment (which condition was removed on the Chief Executive Officer’s retirement)."
When these options were issued in 2010 Mulacek and Vinson's expiration date was 06/21/15.
It says that Mulacek's vesting requirement of continued employment was removed when he retired. ("which condition was removed on the Chief Executive Officer’s retirement").
It is not clear but it seems Vinson was not able to negotiate the same removal of this employment requirement and since FID had not yet occurred he could not exercise the options before he retired.
It is interesting.
RE: Talk about a bad option trade - Palm - 07-17-2013
I agree MRP; Phil stayed on as a founding director and is seen to have the ability to still add value, so he was able to negotiate a waiving of the continued employment clause as a condition on the options. Christian was not able to do that as he was not retained as a Director. However, as I read, it in the case of retirement those options could still be exercised within 90 days of retirement. But in the case of a non-voluntary termination of employment, they expire immediately. With the SEDI report showing that they expired 6/30/2013 it almost looks like he was let go; maybe a non-voluntary retirement.