Kodak has said it was a coincidence that it distributed hundreds of thousands of share options to directors the day before their value rose by 245 per cent.
The former film and camera manufacturer triggered a share price rally on January 9 by jumping on the digital currency bandwagon with the launch of Kodakcoin, a cryptocurrency for photographers. The previous day it had issued 370,974 restricted stock units to seven non-executive directors.
The timing raised eyebrows on Wall Street and in the City. The options were worth about $1.15 million when they were distributed on January 8 and within two days their value had jumped to almost $3.97 million. Last night their value surpassed $4 million.
Restricted stock units (RSUs) track a company’s market performance and, after a set period, can be transferred into shares. Board members at Kodak, which sells film, ink, batteries and industrial printers, are required to wait 12 months before vesting their options.
“It looks a bit odd to see a company hand out shares to its board before announcing something the next day which they must have known was likely to send shares up a lot,” a City source said.
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A spokesman for Kodak said: “The activity was, in fact, a coincidence. As disclosed in our 2016 proxy statement, annual equity grants to non-employee directors automatically occur on the fifth trading day of each calendar year, and vest after one year. This year, the fifth trading day was January 8 and the automatic one-year vesting date for last year’s grant was January 9. If directors elect to defer receipt of their vested shares, then they receive shares of phantom stock.”
Six non-executive directors on the board were each awarded 48,388 RSUs, yesterday worth about $549,000. James Continenza, 54, the chairman, 54, was given 80,646 RSUs.
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