Reload Option

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Reload Option

Employee stock options that can be traded for more employee stock options. When this option is exercised, the option holder pays the strike price in stock already in his/her possession, rather than in cash. A reload option must be exercised prior to the expiry date because the new stock options retain the former expiry date. When the reload option is exercised a new strike is set; it is equal to the market value of the underlying stocks at the time the first option is exercised. This is useful to an employee if he/she wishes to set a new, lower strike for the option. See also: Early Exercise.
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DST's Stock Option Plan permits option holders to use DST shares to exercise their options, and also contains a feature that allows for reload stock options.
DST compensated optionees who had reload stock options for the termination of the reload feature from their stock options.
The current issues section explains and discusses three issues related to stock: repricing of underwater stock options, using reload stock options (a special form of stock option), and accounting for stock awards.