Adaptec 2001 Annual Report Download - page 78

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78
unsolicited third party acquirer, for shares of the Company or for shares of the third party
acquirer having a value of twice the right's then-current exercise price.
NOTE 11. Employee Benefit Plans
Employee Stock Purchase Plan. In 1991, the Company adopted an Employee Stock Purchase Plan
(“ PMC ESPP” ) under Section 423 of the Internal Revenue Code. During 1998, the Company’s
stockholders elected to add a provision to the ESPP. Under the new terms, the number of
shares authorized to be available for issuance under the plan shall be increased automatically
on January 1, 1999, and every year thereafter until the expiration of the plan. The increase will
be limited to the lesser of (i) 1% of the outstanding shares on January 1 of each year, (ii)
2,000,000 shares (after adjusting for stock dividends), or (iii) an amount to be determined by the
Board of Directors.
In 2000, in connection with the acquisition of QED, the Company assumed the QED Employee
Stock Purchase Plan (“ QED ESPP” ). A total of 115,000 shares of common stock have been
reserved for issuance under this Plan. Under this Plan, eligible employees may purchase a
limited amount of common stock at a minimum of 85% of the market value at certain plan-
defined dates. As of December 31, 2001, all employees had converted to the PMC ESPP.
During 2001, 2000, and 1999, there were 245,946 shares,
, 235,104 shares, and 229,518 shares,
respectively, issued under the Plans at weighted-average prices of $31.93, $16.21, and $8.12 per
share, respectively. The weighted-average fair value of the 2001, 2000, and 1999 aw ards was
$31.25, $41.90, and $9.32 per share, respectively. During 2001, an additional 1,622,201 shares
became available under the PM C ESPP and no additional shares were authorized for the QED
ESPP. As of December 31, 2001, 4,846,149 shares were available for future issuance under the
PM C ESPP.
Stock Option Plans. The Company has various stock option plans that cover grants of options to
purchase the Company’s common stock. The options generally expire within five to ten years
and vest over four years.
During 2000, the Company’s stockholders elected to add a provision to the 1994 Incentive Stock
Plan, under which plan most of the outstanding options have been issued. Under the new
terms, the number of shares authorized to be available for issuance under the plan shall be
increased automatically on January 1, 2001 and every year thereafter until the expiration of the
plan. The increase will be limited to the lesser of (i) 5% of the outstanding shares on January 1
of each year, (ii) 45,000,000 shares, or (iii) an amount to be determined by the Board of
Directors.
In addition, the Company assumed the stock option plans of each of the companies it acquired
prior to 2001 (see Note 2). In 2001, the company simplified its plan structure by merging these
plans into one plan. A ll option activity related to these plans is included in the following
tables.
Option activity under the option plans was as follows: