Abstract

Underwater options are pervasive. One of the ways companies are dealing with the issues created by underwater options is by implementing a delayed regrant. A delayed regrant occurs when a company cancels outstanding options and then reissues them six months and one day after the cancel. This article provides a roadmap to follow once the decision has been made to create a cancel and regrant program. The article explores the four key elements of the delayed regrant strategy: identify players and roles, design and test program alternatives, gain management/board approval and communicate and execute.

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