With prospects for a quick rebound in the company’s stock price fading, directors at Palomar Medical Technologies Inc. (NSDQ:PMTI) re-priced some of the options awarded its top three executives by nearly 63 percent.
The options to purchase Palomar stock were granted in May, 2005, when shares in the Burlington, Mass.-based maker of cosmetic laser devices were trading around $25 each. The stock nearly doubled in price by early 2007, but then hit a hard slide, dropping to below $6 a share earlier this year and plunging those options deep under water.
The Nov. 30 board decision buoys the options to the surface again, with a new exercise price of $9.15, a cut of 62.8 percent from their original $24.63 price, and extends their expiration date by more than four years to November, 2019.
But the deal comes with strings — namely, a same-sized reduction in the number of re-priced options the executives hold. Thus, both CEO Joseph Caruso and board executive chairman (and former CEO) Louis Valente each now hold 39,028 options with the $9.15 exercise price, down from 100,000 options apiece at the former price. Senior vice president of sales and marketing Paul Weiner has 31,223 of the $9.15 options, or 48,787 fewer than the 80,000 of the $24.63 options he previously held.
In addition to the newly priced options, Caruso holds another 437,5000 options priced between $1 and $16.53 a share, with about half still underwater at Palomar’s current share price of roughly $9.50. Valente has about 220,000 options priced between $7.97 to $16.53 a share, while Weiner has nearly 235,000 options with the same exercise price range.