The formula uses a kernel-smoothed estimator that takes as inputs the current market prices for all out-of-the-money calls and puts for the front month and second month expirations.
After some time had elapsed and the value of the shares had increased, the employee exercised the options and purchased the stock at less than the then current market price.
The government intends to sell roughly 10 percent, worth about $900 million at the current market price, then offload the rest incrementally, the sources said.