Stamps.com 2002 Annual Report Download - page 65

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Table of Contents
STAMPS.COM INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In April 2000, the Company’ s Board of Directors and stockholders approved an increase of 2,000,000 shares 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 March2000, the number options
available for grant were increased by approximately 9,240,000 due to the acquisition of i-Ship.
As of December31, 2002, the total number of shares authorized for issuance under the 1999 Plan is approximately 18,351,000, 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 January1, 2000 was 1,229,551 shares based on 40,985,054 shares outstanding on the last day of
December 1999. The automatic increase on January1, 2001 was 1,489,627 based upon 49,654,227 shares outstanding on the last day of 2000.
The automatic increase on January1, 2002 was 1,521,681 based upon 50,722,713 shares outstanding on the last day of 2001.
In no event will this annual increase exceed 1,564,715 shares. In addition, no participant in the 1999 Plan may be granted stock options or
direct stock issuances for more than 1,125,000 shares of common stock in total in any calendar year.
Options granted under the 1999 Plan generally vest 25% per year, and the Board of Directors has the discretion with respect to vesting periods
applicable to a particular grant. Each option granted has a 10 year contractual life. During 2002, 2001 and 2000, the Company issued options to
purchase 1,730,500, 1,557,434 and 9,839,198 shares of common stock, respectively, at prices which included approximately $0, $96,100 and
$24,662,000 of a compensation element in 2002, 2001 and 2000, respectively. The total of deferred compensation is being recognized as
expense over the vesting periods of the related options and has been presented as a reduction of stockholders’ equity in the accompanying
balance sheets. The current year amortization of deferred compensation expense of $291,000 is included as a general and administrative
expense.
A summary of stock option activity is as follows (in thousands, except per share amounts):
Options
Outstanding
Weighted Average Exercise Price
Number of
Options
Balance at January 1, 2000 7,088 $ 8.17
Granted 8,854 10.23
Forfeited (4,450 )
13.40
Exercised (2,255 )
0.59
Issued in iShip transaction 985 4.98
Balance at December 31, 2000 10,222 8.81
Granted 1,557 2.42
Forfeited (7,682 )
8.92
Exercised (945 )
0.90
Balance at December 31, 2001 3,152 7.76
Granted 1,731 4.42
Forfeited (187 )
14.39
Exercised (779 )
2.17
Balance at December 31, 2002 3,917 $ 6.10
2003. EDGAR Online, Inc.