Stock Options Package

The company I work for split into two companies a couple of years ago and both are still privately owned by the same person. Since the split, the Owner has hinted that some key people in management may receive stock options down the road.

My company has provided stock options in the past, but not while I have been with them. The recent splitting of the organization resulted in a new Board of Directors and a fresh look at offering a stock option plan. I found out last week that seven of us received a stock options package that will go into effect next September.

I was provided a large packet explaining how the program works and that I can exercise the option to buy up to 16 shares a year (beginning 9/1/09) for 5 years at $1/share. The current value of each share is $500. So, I can obtain up to $8,000 worth of stock each year for only $16.

Historically, when shareholders have left the organization, the company has bought out their shares at the current book value. There’s even been a couple of cases of existing employees selling shares back to the company at a slight discount to get access to the money. In fact, my old GM sold back almost $200K of his shares last year because he wanted to remold his home.

I’m really happy that my company included me on this opportunity, not only for the financial gain, but also because it’s nice to know my hard work is appreciated. This is another piece in the puzzle to reach our early retirement goal in ~19 years.