exercise price

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exercise price

n
(Stock Exchange) stock exchange the price at which the holder of a traded option may exercise his or her right to buy (or sell) a security
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32) The plan must not give the administrative committee the power to reduce the exercise price under any circumstances, except for the usual pro-rata adjustments of option amounts and exercise prices in the case of recapitalizatious or mergers.
If the exercise price of each ISO granted under an employer's plan is equal to the fair market value of the underlying shares of stock at the time of grant (a common situation, although ISOs with exercise prices in excess of current fair market value are obviously permissible), then compliance can be tested by comparing $100,000 to the product of (i) the number of shares with respect to which ISOs of an employee first become exercisable in a particular year and (i) the exercise price per share.
Disclosures you need to make under the new standard are a description of the plan; the number and weighted average exercise prices of options outstanding and the number exercisable at the beginning and end of the year; the number of options granted, exercised, forfeited or expired during the year; and the weighted average fair values of options granted during the year.
For example, if the exercise prices of the options in the above examples were raised to $30 from $25, the value of the options using Black-Scholes would fall to $4.

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