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Xinyuan Real Estate Co., Ltd. Message Board

  • hmmm26 hmmm26 Jun 4, 2012 7:46 PM Flag

    Does Anyone Understand Gurnee's Stock Options?

    It looks like Gurnee did file a Form 144 to sell 150,000 shares (but he hasn't actually sold them yet -- he's got 90 days).

    I'd like to know whether those 150k shares are out of the 189k total that he owns outright or whether they're out of his stock options.

    Does anyone know the details on his stock options? How many he's been allocated (500k?), what the exercise price is (free?), how many have vested, that kind of stuff. I don't know any details, but I think I skimmed a description of them somewhere in the '11 Annual Report.

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    • Growth.Value.....

      Gurnee never sold any of those that I know of....but I am sure we will hear more about Form 144s in the future.

    • 1. Shel, I'll definitely take over on the 189,000 original options question. It's certainly my turn. You've been down some pretty time consuming paths: back to IPO stuff to hunt down Forum, through a bunch of SEC filings on this options stuff, and you found that old thread to help verify tonight's understanding of options.

      2. I'm pretty sure that all of Gurnee's options are for "common shares", or 1/2 of actual ADS's. First, because I'm starting to suspect that options for "common shares" are the only type available under the 2007 Plan (why else wouldn't they switch to granting ADS options?). And second, because I think Star's point was that if the 989,000 that Gurnee beneficially owns represented ADS's, he'd own well over 1% of the company (is the total 73 million ADS's? Something like that, anyway), instead of just 0.7%.

      3. I was confused by the exact same thing you were on the "weighted average grant date fair value" thing. I'm still not positive this is right, but my best guess is that that confusing term only arrives at a number that's important to how XIN accounts in its own books for issuing the options, and it has no application at all to the officers receiving the options. I think it was just an unlucky coincidence that the numbers arrived at that time turned out to be exactly half the options' exercise price. Here's earlier this thread, when I asked the same Q: http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_X/threadview?m=tm&bn=72398&tid=18410&mid=18423&tof=1&rt=2&frt=2&off=1

      • 1 Reply to hmmm26
      • Here's the story on Gurnee's last 189,500 common shares options. They appear out of thin air, without explanation, in the 20-F filed for 2010.

        Here's the important bit: I'm 90% sure they function as fully vested, $0 exercise price common share (1/2 ADS) options.

        As to where they came from, that took some digging. There's an 80% chance they came from the Long Term Incentive Plan, a second, little used stock options plan. Unlike the regular 2007 Options Plan, which requires options issued to have an exercise price of that day's closing price, the LTIP can issue options for free (these are referred to as Restricted Shares).

        If Gurnee's rising legal bills are the reason he needs money, it's possible the options he's registered to sell are the free ones, that way he'd get to keep the entire selling price (over $200,000) as profit.

    • Fair enough. It's definitely my turn. Both of you guys have been down some pretty time consuming paths.

    • Gurnee has 987,500 beneficial shares equal to 0.7% of the company. Not hard to figure out if they are talking shares or ADRs.

    • >>> But I see your prices being half that amount, or they wouldn't have
      put .60 and .61. imo <<<

      It is clear from the 2011 annual that they are talking about common shares not ADRs.

    • >>> So neither of you question this statement.
      "(US$1.21 per share). These options have weighted average grant date fair values of USREPLACE.60 to USREPLACE.61 per option" <<<

      LOL! Here is another one for Gurnee's 500,000 common share options. Fair value of $1.255 per option. Is that half of $1.87?

      ***On March 31, 2009, the Company granted options under the 2007 Plan to purchase up to 500,000 common shares to one employee, at an exercise price equal to the price of the grant date (US$1.87 per share). These options have a weighted average grant date fair value of US$1.255 per option, and a total expected compensation cost, net of expected forfeitures, of US$564,750. These options have a vesting period based on length of service of 36 months and will expire no later than March 31, 2019.***

    • You guys really don't have anything better to do??

    • It time you go do the sniffing hmmm, instead of us.
      But I see your prices being half that amount, or they wouldn't have
      put .60 and .61. imo.

    • So neither of you question this statement.
      "(US$1.21 per share). These options have weighted average grant date fair values of USREPLACE.60 to USREPLACE.61 per option"

    • LOL!!

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