Classmates.com 2006 Annual Report Download - page 93

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5. STOCK
-
BASED COMPENSATION PLANS
The Company has three active equity plans under which it is authorized to grant stock options, restricted stock awards and RSUs.
Stock options granted to employees generally vest over a three- or four-year period. Stock options granted to directors generally vest over a
nine-month to three-
year period, either monthly or annually. Stock option grants expire after ten years unless cancelled earlier due to termination
of employment or Board service. Certain stock option grants are immediately exercisable for unvested shares of common stock, with the
unvested portion of the shares remaining subject to repurchase by the Company at the exercise price until the vesting period is complete.
RSUs granted to employees generally vest over a two- to four-year period. RSUs granted to non-employee directors generally vest over a
one-year period.
Upon the exercise of a stock option award, the vesting of an RSU or the grant of restricted stock, common shares are issued from authorized
but unissued shares. At December 31, 2006, an aggregate of 27.6 million shares were reserved under the Company’s plans, of which 4.0 million
shares were available for issuance at December 31, 2006.
Stock-Based Compensation Recognized
The following table summarizes the stock-based compensation that has been included in the following captions for each of the periods
presented (in thousands):
F- 31
Year Ended December 31,
2006
2005
2004
Operating expenses:
Cost of revenues
$
817
$
183
$
16
Sales and marketing
3,457
954
76
Product development
5,367
1,069
32
General and administrative
9,527
7,746
2,325
Total stock-based compensation
$
19,168
$
9,952
$
2,449
Tax benefit recognized
$
3,962
$
1,688
$
116