In its press release, SimpleTech said stock options to purchase approximately 5.6 million shares of SimpleTech common stock are immediately exercisable, representing 56% of the firm’s outstanding stock options. The company expects that it will not have to recognize compensation expense of approximately $9.4 million in future periods beginning January 1, 2006, including approximately $3.8 million of compensation expense in 2006.
In addition, according to its release, SimpleTech’s Board of Directors has approved the termination of its Employee Stock Purchase Plan.
In its announcement, Federal Trust Corporation said the acceleration affects 196,309 options that were granted between 2001 and 2005. The value of these options is approximately $238,000.
James Suskiewich, President and Chief Executive Officer of Federal Trust, said he did not anticipate that there would be a significant number of options exercised in early 2006 as a result of this acceleration in vesting.
A summary of FAS123 can be read here .