Stamps.com 2005 Annual Report Download - page 60

STAMPS.COM INC.
NOTES TO FINANCIAL STATEMENTS (continued)
The following tables summarize information concerning outstanding and exercisable options at December 31, 2005 (in thousands, except
number of years and per share amounts):
Employee Stock Purchase Plan
In June 1999, the Company’s Board of Directors adopted an Employee Stock Purchase Plan (ESPP or Purchase Plan) which allows
eligible employees of the Company to purchase shares of common stock, at semi-annual intervals, with their accumulated payroll deductions.
Eligible participants may contribute up to 15% of cash earnings through payroll deductions, and the accumulated deductions will be
applied to the purchase of shares on each semi-
annual purchase date. The purchase price per share will be equal to 85% of the fair market value
per share on the participant’s entry date into the offering period or, if lower, 85% of the fair market value per share on the semi-annual
purchase date.
Upon adoption of the plan, 150,000 shares of common stock were reserved for issuance. This reserve will automatically increase on the
first trading day in January each year, beginning in calendar year 2000, by an amount equal to 1% of the total number of outstanding shares of
the Company’s common stock on the last trading day in December in the prior year. In no event will any annual increase exceed 260,786
shares.
Total shares of common stock issued pursuant to the ESPP during 2005, 2004 and 2003 were 43,170, 32,449 and 26,867, respectively.
Savings Plan
During 1999, the Company implemented a savings plan for all eligible employees, which qualifies under Section 401(k) of the Internal
Revenue Code. Participating employees may contribute up to 15% of their pretax salary, but not more than statutory limits. The Company
matches 50% of the first 4% a participant contributes. The Company expensed approximately $150,094, $140,996 and $115,000 in 2005, 2004
and 2003, respectively, related to this plan.
11.
Options Outstanding Options Exercisable
Range of Exercise Prices
Number
Outstanding
Weighted
Average
Remaining
Contractual
Life (in Years)
Weighted
Average
Exercise
Price per
Share
Number
Exercisable
Weighted
Average
Exercise
Price per
Share
$0.10 – $0.12
21
2.7
$
0.12
21
$
0.12
$0.54 – $0.54
14
3.1
0.54
14
0.54
$3.78 – $4.78
273
4.8
4.13
273
4.13
$6.12 – $8.78
639
6.1
7.07
593
7.08
$9.38 – $13.89
364
7.2
10.53
236
10.32
$14.09 – $20.69
990
8.8
17.64
825
17.50
$22.54 – $23.50
161
6.4
23.40
94
23.38
$36.42 – $36.42
40
4.1
36.42
40
36.42
$55.88 – $79.00
99
3.9
62.80
99
62.80
$98.50 – $131.50
7
3.9
123.71
7
123.71
$0.10 – $131.50
2,608
7.0
$
15.03
2,201
$
14.98
Legal Proceedings
In addition to the legal proceedings described in Item 3 of this Annual Report, the Company is a party to various other legal actions, claims
and proceedings incidental to its business. Litigation is uncertain, and the outcome of individual cases is not predictable with any assurance.
The Company has established loss provisions only for matters in which losses are probable and can be reasonably estimated. Some of the
matters pending against the Company involve potential compensatory, punitive or treble damage claims, or sanctions, that if granted, could
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