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This yields larger profit to the key employee as the options are already “in-the- money.” On the other hand, shareholders are told that key employee(s) are getting "At-the-money” options.

About The Author Arushi Bhandari is an MBA and a licensed CPA in the state of California.

Brocade disclosed this grant to its shareholders and investors in the 2002 Proxy Statement according to the rules of the SEC.

A week later the stock was trading at /share and a month later at /share.

The recipient of the stock takes advantage of a lower stock price which translates into greater profit when the options are exercised.

Example: On March 31, the company stock is trading at 0 whereas on March 1 it was trading at /share.