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prsch3259

08/25/10 1:55 PM

#7177 RE: FTW #7176

What Does Overhang Mean?

A measure of the potential dilution to which a common stock's existing shareholders are exposed due to the potential that stock-based compensation will be awarded to executives, directors or key employees of the company. It is usually represented in percentage form and is calculated as stock options granted, plus the remaining options that have yet to be granted divided by the total shares outstanding.