eTrade 2002 Annual Report Download - page 159

Table of Contents
Index to Financial Statements
2000, 500,000 stock options were granted below fair market value outside the 1996 Plan. Such options were immediately vested. Accordingly,
the Company recorded expense of $4.9 million for the estimated fair value of these options. In fiscal 2000, the weighted average fair value of
these options was $13.55 and the weighted average exercise price was $13.00. These options expire at various dates in 2009 and 2010. As of
December 31, 2002, 400,000 of these options were canceled unexercised. During fiscal 2000, 2,000,000 stock options were granted above fair
market value. These options were granted at $30.00 per share when the then current fair market value was approximately $24.00, and the
Company did not record any expense associated with these grants.
Concurrent with the Former CEO’ s resignation in fiscal 2003, the Company extended the expiration date of his previously vested options to
purchase 5.4 million shares of common stock at a weighted average price of $20.33 per share to January 2004; as all options were fully vested
at January 23, 2003, none were canceled. As a result of this, the Company will record compensation expense of $46,000 in the first quarter of
fiscal 2003.
The following table summarizes information on outstanding and exercisable stock options as of December31, 2002:
Options Outstanding Options Exercisable
Option Exercise Price Number
Outstanding
(inthousands)
Weighted Average
Contractual Life (Years) Weighted Average Exercise Price Number Exercisable (inthousands) Weighted Average Exercise Price
$0.01–$2.99 1,938 3.90 $ 1.49 1,935 $ 1.49
$3.02–$4.25 4,529 5.75 $ 4.16 4,113 $ 4.18
$4.27–$5.73 5,928 7.94 $ 5.11 3,303 $ 5.18
$5.74–$7.09 11,336 8.03 $ 6.63 6,908 $ 6.70
$7.20–$10.33 6,287 8.45 $ 8.65 2,017 $ 7.82
$10.34–$24.78 7,984 7.11 $ 19.79 5,816 $ 20.44
$24.84–$58.19 3,426 6.97 $ 29.81 3,055 $ 29.90
$0.01–$58.19 41,428 7.37 $ 10.66 27,147 $ 11.40
Stock Purchase Plan
In July 1996, the shareholders of the Company approved the 1996 Stock Purchase Plan (the “1996 Purchase Plan”), and reserved 2,600,000
shares of common stock for sale to employees at a price no less than 85% of the lower of the fair market value of the common stock at the
beginning of the two-year offering period or the end of each of the six-month purchase periods. During fiscal 2002, the reserved shares of the
1996 Purchase Plan were reduced to zero, with 341,904 additional shares remaining to be purchased by employees. In May 2002, the
shareholders of the Company approved an increase in the authorized shares by 341,904, which were subsequently purchased by employees. As
a result these shares were accounted for as variable plan options on which the Company recognized a charge of $0.4 million in fiscal 2002
during the time they were in escrow. Also in May 2002, the shareholders of the Company approved the 2002 Employee Stock Purchase Plan
(“2002 Purchase Plan”), and reserved 5,000,000 shares of common stock for sale to employees at a price no less than 85% of the lower of the
fair market value of the common stock at the beginning of the one-year offering period or the end of each of the six-month purchase periods. At
December 31, 2002, 5,000,000 shares were available for purchase under the 2002 Purchase Plan.
Additional Stock Plan Information
As permitted by SFAS No. 123, the Company applied APB Opinion 25 and related interpretations in accounting for its stock option plans, and
accordingly does not record compensation costs on grants to employees. If the Company had elected to recognize compensation cost based on
the fair value of options at the
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2003. EDGAR Online, Inc.