The value of the options given to Bezeq The Israeli Telecommunication Co. Ltd. (TASE: BEZQ) CEO Yacov Gelbard following the drafting of the restructuring program at the company amounts to NIS 42 million. This calculation is based on what Gelbard would receive if he exercised his options at Bezeq's current price.
The company's report last week reveals that Gelbard received NIS 16.88 million options exercisable at a price of NIS 3.99 per share (NIS 5.42 before the distribution of dividends). Bezeq has not given details of the value of the options according to Black & Scholes formula, which takes into account, among other things, the options' time to maturity, capitalization rate, and financing period, and which would reduce the value of the benefit to a certain extent.
Bezeq chairman Adv. Dov Weissglas received 3.1 million options with an exercise price of NIS 4.59 per share, after the distribution of dividends, so their value, on the basis of the current stock price (NIS 6.50), is NIS 6 million.
Last week the Bezeq board approved the distribution of options to the company's senior executives. External experts say the value of the options distributed totals NIS 111 million and amount to 2.5% of the company's share capital.
Among those who were granted options are senior company managers, from the rank of deputy CEO and upward, as well as the CEOs of Bezeq's subsidiaries. In all, 40 Bezeq managers received options. The exercise price of options for workers who were employed at Bezeq at the end of 2005 will be NIS 5.42 per share, while for others the price will based on the stock price on the day they joined the company. The options have a four-year maturity period, with workers able to exercise some of them at the end of each year.
In addition, Bezeq’s long-time employees also received options worth NIS 170 million, convertible into 3% of share capital, with the exercise price set at 50% of the share price of the date of allocation. The options will be subject to a two-year lock-up period, following which they can be exercised within three years.
Published by Globes [online], Israel business news - www.globes.co.il - on March 5, 2007
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