Classmates.com 2005 Annual Report Download - page 106

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and reserved for issuance. Under the ESPP, each eligible employee may authorize payroll deductions of up to 15% of their compensation to
purchase shares of common stock on two “purchase dates” each year at a purchase price per share equal to 85% of the lower of (i) the closing
selling price per share of common stock on the employee’s entry date into the two-year offering period in which the purchase date occurs or
(ii) the closing selling price per share on the purchase date. Each offering period has a twenty-four month duration and purchase intervals of six
months.
During the years ended December 31, 2005 and 2004, the six months ended December 31, 2003 and the year ended June 30, 2003,
approximately 0.4 million, 0.4 million, 0.5 million and 0.9 million shares were purchased under the Company’s ESPP at weighted average
purchase prices of $7.46, $7.98, $3.16 and $1.99 per share, respectively. At December 31, 2005, there were approximately 2.3 million shares
available for future issuance. The weighted average fair value of ESPP shares purchased during the years ended December 31, 2005 and 2004,
the six months ended December 31, 2003 and the year ended June 30, 2003 were $3.54, $6.38, $2.21 and $1.29 per share, respectively.
Equity Awards
In January 2004, the Board of Directors issued 575,000 restricted shares of common stock at par value to certain of the Company’s
executive officers. The shares vest entirely at the end of the four-year period from the date of grant. In connection with these shares, the
Company recorded deferred stock-based compensation of $11.4 million, which is being amortized on a straight-line basis over the four-year
vesting period. In December 2004, the Company repurchased 100,000 restricted shares of common stock in connection with the resignation of an
executive officer. In connection with the repurchase, the Company reversed $2.0 million in deferred stock-based compensation.
In January 2004, the Compensation Committee of the Board of Directors approved stock option grants of 1.2 million shares to the
Company’s executive officers. The shares are immediately exercisable, vest over a three-year period from the date of grant and have an exercise
price of $18.70.
In January 2004, the Compensation Committee of the Board of Directors approved stock option grants of 0.1 million shares to the members
of the Board. The shares are immediately exercisable, vest monthly over a one-year period from the date of grant and have an exercise price of
$18.70.
In March 2005, the Company issued approximately 1.0 million RSUs to certain of the Company’s executive officers. Each RSU entitles the
officer to receive one share of the Company’s common stock upon vesting. The units vest 25% annually over the four-year period beginning
February 15, 2005. In connection with these units, the Company recorded deferred stock-based compensation of $11.0 million, which is being
amortized over the vesting period.
In March 2005, the Company issued approximately 0.4 million additional RSUs to its other employees. Each RSU entitles the employee to
receive one share of the Company’s common stock upon vesting. The units vest 25% on February 15, 2006 and quarterly thereafter for three
years. In connection with these units, the Company recorded deferred stock
-based compensation of $3.7 million, which is being amortized over
the vesting period.
In March 2005, the Company approved stock option grants of 1.3 million shares to the Company’s employees with exercise prices ranging
from $10.55 per share to $10.58 per share. The options vest 25% on February 15, 2006 and monthly thereafter for three years.
In April 2005, the Company issued 37,500 RSUs to members of its Board of Directors. Each RSU entitles the Board member to receive one
share of the Company’s common stock upon vesting. The units vest 100% on February 15, 2006. In connection with these units, the Company
recorded deferred stock-based compensation of approximately $0.3 million, which is being amortized over the vesting period.
F- 37