JB and ZJMY Holding Co (JBZY)

[nsomniyak]

That is why they announce it BEFORE the stock got to .10 - otherwise the market would react very negatively.

This is exactly the same as when an established company issues options to its employees. If the company does well the stock price appreciates, and the options are in the money.

Mechanically, the underlying company simply reserves shares at the time of the grant as treasury shares and then issues them out as options are exercised (or, in this case, as employees utilize this program). They don't go out in the market and buy back shares at higher prices to give them to employees at lower prices. Fulfilling employee buys in this program does not introduce a cash flow issue.