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11. Stock Options and Employee Stock Purchase Plan
j2 Global’s share-
based compensation plans include the Second Amended and Restated 1997 Stock Option Plan, 2007 Stock Plan
and 2001 Employee Stock Purchase Plan (each is described below).
In November 1997, j2 Global’
s Board of Directors adopted the j2 Global Communications, Inc. 1997 Stock Option Plan, which was
twice amended and restated (the “1997 Plan”).
The 1997 Plan terminated in 2007, although stock options and restricted stock issued under the
1997 Plan continue to be governed by it. A total of 12,000,000 shares of common stock were authorized to be used for 1997 Plan purposes. An
additional 840,000 shares were authorized for issuance upon exercise of options granted outside the 1997 Plan.
In October 2007, j2 Global’s Board of Directors adopted the j2 Global, Inc. 2007 Stock Plan (the “2007 Plan”).
The 2007 Plan provides
for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units and other
share-
based awards. The number of authorized shares of common stock that may be used for 2007 Plan purposes is 4,500,000. Options under the
2007 Plan may be granted at exercise prices determined by the Board of Directors, provided that the exercise prices shall not be less than the fair
market value of j2 Global’
s common stock on the date of grant for incentive stock options and not less than 85% of the fair market value of j2
Global’s common stock on the date of grant for non-statutory stock options.
At December 31, 2011, 2010 and 2009, options to purchase 1,155,335, 2,647,130, and 2,939,410 shares of common stock were
exercisable under and outside of the 2007 Plan and the 1997 Plan combined, at weighted average exercise prices of $19.80, $11.31 and $8.96,
respectively. Stock options generally expire after 10 years and vest over a five-year period.
All stock option grants are approved by “outside directors” within the meaning of Internal Revenue Code Section 162(m).
Stock Options
Stock option activity for the years ended December 31, 2011, 2010 and 2009 is summarized as follows:
For the year ended December 31, 2011, j2 Global granted 163,319 options to purchase shares of common stock pursuant to the 2007
Plan to newly hired and existing members of management and Board members. These stock options vest 20% per year and expire 10 years from
the date of grant.
The per share weighted–average grant-
date fair value of options granted during the years 2011, 2010 and 2009 was $12.54, $11.00 and
$9.89, respectively.
(a)
Second Amended and Restated 1997 Stock Option Plan and 2007 Stock Plan
Number
of
Shares
Weighted
-
Average
Exercise Price
Weighted
-
Average
Remaining
Contractual Life
(In Years)
Aggregate
Intrinsic
Value
Options outstanding at December 31, 2008
4,322,930
$11.73
Granted
808,760
$18.05
Exercised
(523,290
)
$5.18
Canceled
(127,809
)
$28.00
Options outstanding at December 31, 2009
4,480,591
$13.17
Granted
167,967
$23.13
Exercised
(816,552
)
$9.18
Canceled
(37,612
)
$20.26
Options outstanding at December 31, 2010
3,794,394
$14.40
Granted
163,319
$29.42
Exercised
(1,820,678
)
$7.92
Canceled
(49,340
)
$24.76
Options outstanding at December 31, 2011
2,087,695
$20.99
5.7
$16,579,072
Exercisable at December 31, 2011
1,155,335
$19.80
4.2
$10,785,222
Vested and expected to vest at December 31, 2011
1,954,939
$20.80
5.5
$15,906,751
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