Siebel staff: We'll take cash

Siebel Systems' employees have spoken: They'll gladly give up stock options for cold, hard cash.

In a filing with the Securities and Exchange Commission Thursday, the software maker said that roughly 3,400 employees swapped their eligible "underwater" stock options for $1.85 in cash or stock. A stock option is underwater when the strike price is higher than the current value of the stock.

San Mateo, Calif.-based Siebel said in August it would allow employees with options with exercise prices at or above $40 to get $1.85 in cash or stock for every underwater share they own. CEO Tom Siebel wasn't eligible for the swap.

Employees with option holdings that amount to less than $5,000 got cash. Those workers with options holdings worth more than $5,000 got the payout in stock.

According to Siebel's filing, 1,390 employees elected to exchange an aggregate of about 2,416,000 stock options shares for cash proceeds of about $4.47 million. About 2,030 workers swapped 25,616,000 stock options for a little more than 5.3 million shares of common stock, worth about $16.9 million net of withholding taxes.

Of the roughly 31.9 million shares options eligible to be exchanged, 90 percent of them were swapped for cash or stock. As a result, Siebel will eliminate about 12 percent of its outstanding stock options with an aggregate value of $59 million. Siebel will take a charge for its third quarter to cover the exchange.

Shares of Siebel closed at $5.53 on Thursday, well below a 52-week high of $38.38.