Stamps.com 2001 Annual Report Download - page 63

STAMPS.COM INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
13. Stockholders' Equity
Restricted Stock
During 1998, the Company issued restricted stock to an employee and a director totaling 1,988,475 shares. Part of the purchase price included a
full recourse note payable to the Company for $99,000. These shares vested one-fourth on May 30, 1999 and the remaining shares vest monthly
over the subsequent thirty-six months. The Company issued these shares at prices which included approximately $650,000 of a compensation
element. The $650,000 is being recognized as expense over the vesting periods and has been presented as a reduction of stockholders' equity in
the accompanying balance sheets.
Redeemable Preferred Stock
In February 1998, the Company issued 3,762,500 shares of its Series A Redeemable Preferred Stock at $0.40 per share and warrants to acquire
6,020,000 shares of the Company's Series B Redeemable Preferred Stock at $0.75 per share. In August and October 1998, 6,020,000 shares of
Series B Redeemable Preferred Stock were issued under these warrants.
In February 1999, the Board of Directors approved the sale of Series C Redeemable Preferred Stock and the Company issued 5,464,486 shares
of its Series C Redeemable Preferred Stock at $5.49 per share.
In connection with the Company's Initial Public Offering in June 1999, all shares of Series A, B, and C Preferred Stock converted into
22,870,479 shares of Common Stock.
Notes Receivable
In connection with the issuance of Common Stock during 1999, the Company exchanged shares with a fair value of $117,000 for full recourse
notes receivable of the same amount. These notes receivable bear interest at 9% per annum and are payable in February 2003. The unpaid
balance of these notes receivable for the years ended December 31, 2001 and 2000 is $101,000.
14. Employee Stock Plans
Stock Incentive Plans
The 1999 Stock Incentive Plan (the "1999 Plan") serves as the successor to the 1998 Stock Plan (the "Predecessor Plan"). The 1999 Plan
became effective in June 1999. At that time, all outstanding options under the Predecessor Plan were transferred to the 1999 Plan, and no
further option grants can be made under the Predecessor Plan. All outstanding options under the Predecessor Plan continue to be governed by
the terms and conditions of the existing option agreements for those grants, unless the Company's compensation committee decides to extend
one or more features of the 1999 Plan to those options.
In October 1999 and April 2000, the Company's Board of Directors and stockholders approved an increase of 2,500,000 and 2,000,000 shares
respectively, to the number of shares eligible to be granted under the 1999 Plan from the initial authorization of 7,290,000 shares of the
common stock. In March 2000, the number options available for grant were increased by approximately 9,240,000 due to the acquisition of
i-Ship.
The total number of shares currently authorized for issuance under the 1999 Plan is approximately 18,373,000, which amount includes an
automatic annual increase to the share reserve of 3% of the Company's outstanding common shares on the last trading day in December. The
automatic increase on January 1, 2000 was
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2002. EDGAR Online, Inc.