Earthlink 2005 Annual Report Download - page 89

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EARTHLINK, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As of December 31, 2005, the Company had reserved 23.6 million shares of common stock for the issuance of equity-based incentive
compensation under its stock incentive plans. Approximately 7.4 million outstanding options were granted pursuant to legacy plans that
expired during 2005; however, the options survive the expiration of the plan and expire at future dates pursuant to the terms of the various
option agreements. In addition, approximately 12.9 million stock options, restricted stock units and phantom share units were outstanding
under continuing plans that expire in 2010, and 3.3 million shares were available for grant under the continuing plans.
Warrants and Stock Options
Prior to December 31, 2000, the Company issued warrants to purchase shares of the Company’s common stock to certain members of its
Board of Directors, customers, consultants, lessors, creditors and others. The Company did not issue warrants during the years ended
December 31, 2003, 2004 and 2005. As of December 31, 2005, warrants to purchase a total of 77,000 shares of common stock were
outstanding at exercise prices ranging from $3.02 to $5.50. The warrants are currently exercisable and expire at various dates through
October 2007.
As of December 31, 2005, options to purchase 162,000 shares of common stock were outstanding that were not granted pursuant to the
Company’s stock incentive plans. The options were granted during 1996, are currently exercisable and expire in September 2006.
Options and Warrants Outstanding
The following table summarizes information concerning stock option and warrant activity during the years ended December 31, 2003,
2004 and 2005:
88
Year Ended December 31,
2003
2004
2005
Weighted
Weighted
Weighted
Average
Average
Average
Stock Options
Exercise
Stock Options
Exercise
Stock Options
Exercise
and Warrants
Price
and Warrants
Price
and Warrants
Price
(shares in thousands)
Outstanding at beginning of year
28,356
$
12.62
22,742
$
11.93
20,729
$
11.64
Granted
2,433
7.07
3,852
9.53
4,877
10.20
Exercised
(1,010
)
3.34
(2,120
)
7.44
(3,142
)
7.28
Canceled
(7,037
)
14.25
(3,745
)
13.59
(2,556
)
12.48
Outstanding at end of year
22,742
11.93
20,729
11.64
19,908
11.87
Options exercisable at year end
12,757
12,535
11,278
Weighted-average grant date fair
value of options granted during the
year
$
4.34
$
4.71
$
4.65