Hundreds of employees at internet company SurfControl are being given the option to cash in worthless share options and replace them with fewer, cheaper options which might stand a chance of showing a profit.
SurfControl, whose products monitor workplace web surfing, issued 4.2m share options to 350 workers and almost all of them are under water. The shares have fallen from £38.62 last year to 725p now.
The options are designed to motivate and retain staff.
SurfControl said staff could surrender their options and they would be reissued with an exercise price 20% above today's middle market closing price. Employees would receive 20% fewer new options.
"The people within SurfControl and the business as a whole have consistently exceeded expectations, but the worldwide decline in valuations of technology stocks has resulted in almost 85% of the options issued to employees having an exercise price significantly above the current market price," said Steve Purdham, chief executive officer.
Analysts welcomed the move, which was agreed with shareholders and will include existing performance targets.
"The company has exceeded every forecast but has suffered due to a derating of the sector. The scheme seems fair for shareholders and employees," one analyst said.
Last month the Cheshire-based company reported better than expected third quarter results.
