Fashion Inc. (“Fashion” or “the Company”), an SEC registrant, is
a fashion retailer that sells men’s and women’s clothing and
accessories. As an incentive to its employees, the Company
established a compensation incentive plan in which a total of
100,000 options were granted on January 1, 20X0. On that date (the
grant date), Fashion’s stock price was $15.00 per
share.
The significant terms of the incentive plan are as follows:
The options have a $15.00 “strike” or exercise price (the...