Digital River 2001 Annual Report Download - page 52

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5. Stockholders’ Equity:
Warrants
Warrants to purchase 106,087 and 356,087 shares of Common Stock issued principally in conjunction
with sales of Common Stock at an exercise price of $3.00 per share were outstanding as of December
31, 2001 and 2000, respectively.The warrants expire at various dates between February and August 2003.
Share Repurchase Program
In April 2001, the Company announced a share repurchase program of up to $5,000,000 of its outstanding
shares of Common Stock. R epurchases will be at the Company’s discretion based on ongoing assessments
of the capital needs of the business and the market price of its shares. During 2001, 57,500 shares were
repurchased under the program for total consideration of $267,000.
6. Stock Options:
The Company’s 1998 Stock Option Plan (the “SOP”) provides for the granting of incentive or
nonqualified stock options to purchase up to 3,983,333 shares of Common Stock. Options granted to
employees typically expire no later than ten years after the date of grant. Incentive stock option grants
must have an exercise price of at least 100% of the fair market value of a share of common stock on the
grant date. Incentive stock options granted to employees who immediately before such grant owned stock
directly or indirectly representing more than 10% of the voting power of the stock of the Company will
have an exercise price of 110% of the fair market value of a share of common stock on the grant date
and will expire no later than five years from the date of grant.
The Company’s 1999 Non-Officer Stock Option Plan (the NOP) provides for the granting of non-
qualified stock options to purchase up to 5,450,000 shares of Common Stock and has terms similar
to those of the SOP.
In addition to shares granted under the SOP and NOP, the Company granted options to purchase
605,882 shares of Common Stock at an exercise price of $8.50 per share to certain members of
management outside of both plans during 1998. At December 31, 2001, options outstanding outside
of both plans totaled 13,529 shares.
50
Notes to Consolidated Financial Statements December 31, 2001 and 2000
Digital River 2001 Annual Report