MAHONING VALLEY Delphi offers employees a deal to trade stock options for cash

Delphi Corp. is offering employees holding certain stock options the chance to exchange them for a cash settlement.
The offer applies to about 19 million options that have an exercise price of at least $17 a share.
Employees have the option of exchanging the options for stock appreciation rights, called SARs.
Stock options allow holders to buy stock at a certain price, regardless of the trading price of the stock. To make money, they would have to sell the stock at a higher price.
SARs allow holders to receive the difference between the exercise price and trading price in cash. If the trading price reaches $18 a share, for example, the holder of $17 SARs would receive $1 a share.
Delphi stock is trading at less than $9 a share.
Eligible employees will be contacted by the company.
The advantage to employees is that the redemption of SARs carries lower fees than stock options, said Paula Angelo, a Delphi spokeswoman.
Delphi benefits by having fewer options outstanding, she said. Industry analysts have been concerned that the future value of Delphi shares would suffer if its options were redeemed.
Directors and top-ranking officials of the auto parts supplier can't participate in the plan.
Michigan-based Delphi is the parent of Delphi Packard Electric Systems, which has 4,000 hourly and 1,400 salaried employees in the Mahoning Valley.