VSAT satellite telecommunication solutions provider

Gilat Satellite Networks

(Nasdaq:GILTF) announced on Tuesday that it has initiated a voluntary stock option exchange program for its employees. The idea is to compensate its hapless workers for the dive in the company's share price from a high of $180 a year ago to $13.

Under the program, employees of Gilat and its subsidiaries who have been granted options under Gilat's stock option plans, can choose to cancel outstanding stock options previously granted to them, in exchange for an equal number of new options to be granted at a future date.

The exercise price of these new options will be equal to the fair market value of the Company's ordinary shares as reported by Nasdaq on the date the options will be granted, which will be more than six months following the cancellation of the old options.

The exchange program has been organized to comply with FASB Interpretation No. 44 "accounting for certain transactions involving stock compensation."

Accordingly, there will be no variable compensation charges as a result of this stock option exchange program.

In March of this year, the company published a profit warning for 2001, and fired 500 employees out of its staff of 1,500. The company has a current market valuation of $310 million.