Company reprices options

Tuesday, June 28, 2005 | 10:54 a.m.

Archon Corp.'s board of directors has decided to reprice options granted to company executives Christopher Lowden and David Lowden, revising the exercise price to $20.50 per share from the previous exercise price of $1 per share.

The exercise price would reduce the value of the 150,000 share options granted to each Lowden from more than $4 million each to more than $1 million, based on Archon's midday share price of about $29.50.

The repricing follows a complaint letter from a major institutional shareholder questioning the size and timing of the grants to members of Archon Chief Executive Paul Lowden's immediate family.

In a follow-up letter to Paul Lowden filed with the Securities and Exchange Commission today, shareholder D.E. Shaw & Co. chided Archon management but said it wouldn't pursue legal action against the company.

D.E. Shaw called the option grants "estate planning masquerading as ordinary course compensation."

"The proxy contained no information about either David or Christopher (other than their titles), their contributions to Archon's performance or the necessity of providing them with what even at the new strike price is still a significant windfall," the letter said.