However, risk aversion may not be the only motivation for
early exercise by executives.
The company president and chief executive officer, Peter Barnes, said, 'The
early exercise of warrants provides Silver Wheaton with significant funds, at an attractive cost of capital, for the continued expansion of our portfolio of silver interests.
Zivney, 1991, "The Value of
Early Exercise in Option Prices--An Empirical-Investigation", Journal of Financial and Quantitative Analysis, 26:129-138
Exhibit 3 extends the example to a 10-period binomial with the expectation of
early exercise when the underlying share price reaches 1.
A second implication is that restrictions on
early exercise may have a significant effect on the firm's ESO cost.
The
early exercise program resulted in the exercise of 878,800 July 2011 warrants at $1.
The Company will make application to the Exchange for formal approval of an incentive program to encourage the
early exercise of outstanding warrants (the "Original Warrants") held by warrant-holders, other than insiders of the Company and pro group members who, in accordance with requirements of the Exchange, are not being offered the right to participate in the warrant incentive program.
did not receive consent from the bondholder trustee to the
early exercise of its put options to sell its investment in Westinghouse back to Toshiba Corporation (TOKYO: 6502).
Company to Offer Same
Early Exercise Terms to Other Warrant Holders
made an
early exercise of all its warrants and purchased 37,500,000 common shares of VG Gold for gross proceeds of $5,625,000.
The probability of
early exercise of the stock employee stock options has been taken into account.
Additionally, this
early exercise of the option is a clear acknowledgement of the promising data recently announced from the Phase 2 trials on our lead product candidate, ATX-101," said Keith R.
