RE: chickened out - goldjockstrap I have been in the markets for many years and I have yet to see a company set their option prices lower than the market price at time of issuance, but perhaps the odd one could have slipped by me. having said that it wouldn't make any sense seeing that options usually have several years duration so the company would have to have a really negative forcast for their company down the road but hey...anything is possible. For example look at the newly issued options, they are priced at $6.01 and we are in terrible market conditions. I have seen though, companies adjust the prices lower and extend the expiry dates of their options/warrants after issuance and prior to original expiry dates due to negative market conditions causing lower stock prices in comparison to their option/warrant prices... which wasn't the case with PG. Normally the price adjustments will not be below the market value at the time it takes place, the regulators would not allow it. These adjustments give as you say the holders incentive and also helps the company gain funds for their coffers without having to do small public offering in hard times.
Yes he certainly could have held the stock! or sold only the amount that would have covered his cost, but who knows what his needs are/were. I'm not trying to defend him because we never want to see an insider sell their stock but at the same time we cannot expect these people only buy and never sell either. He has done the same in previous years..excercised his options, sold his shares and taken his profit. So it's not an isolated incident that we can attribute to the now conditions of the company or market.
Other than secretary of the company he doesn't seem to have any other management function, he isn't even listed on the company website.....