Stock Option Grants
Sunrise's executive stock option grants appear fortuitously timed, with strike prices at or near periodic or yearly stock price lows that preceeded rapid and/or long-term stock price increases.
- The average return of Sunrise stock in the 30 days prior to each grant was negative 2.7%. In the thirty days after each grant, the average return was positive 12.1%.
- This did not just reflect the activity of the overall market, because Sunrise stock performed worse than the overall market before option grants and better after them.
A sampling of improbably timed grants:
- For the 425,000 options granted to multiple recipients on May 2, 1997, the strike price was $12.1825, reflecting the closing price on May 1, 1997. The lowest close of the year was the prior trading day, April 30, 1997.
- For the repricing of 730,000 options for multiple recipients on September 14, 1998, the new strike price was $12.50, slightly above the closing price of $12.09375 on the previous trading day, September 11, 1998. The lowest close of the year was $11.97 on September 3, 1998.
- For the grant of 350,000 options to Chairman and CEO Paul Klaassen on September 11, 2000, the strike price was $8.50, based on the close of the previous trading day and the lowest price for the rest of the year.
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