eTrade 2005 Annual Report Download - page 187

Table of Contents
A summary of non-vested restricted stock award activity is presented below:
Shares
(inthousands)
Weighted-
Average
Grant
Date Fair
Value
Non-vested at December 31, 2004:
2,615
$
9.35
Issued
830
$
11.93
Released (vested)
(276
)
$
10.31
Canceled
(516
)
$
9.18
Non-vested at December 31, 2005
2,653
$
10.09
As of December31, 2005, there was $14.0 million of total unrecognized compensation cost related to non-vested awards. This cost is
expected to be recognized over a weighted-average period of 2.9 years.
Employee Stock Purchase Plan
For the year ended December31, 2005, the Company recorded $0.4 million in compensation expense for its employee stock purchase
plan. Effective August1, 2005, the Company changed the terms of its purchase plan to reduce the discount to 5% and discontinued the
look-back provision. As a result, the purchase plan was not compensatory beginning August1, 2005. At December31, 2005, 1,083,195
shares were available for purchase under the 2002 Employee Stock Purchase Plan (“2002 Purchase Plan”.)
Prior to the plan change, the shareholders of the Company had approved the 2002 Purchase Plan, and reserved 5,000,000 shares of
common stock for sale to employees at a price no less than 85% of the lower of the fair market value of the common stock at the
beginning of the one-year offering period or the end of each of the six-month purchase periods. Under SFAS No.123(R), the 2002
Purchase Plan was considered compensatory. As a result, the Company recorded $0.4 million of compensation expense for the
subscription period ended July31, 2005.
401(k) Plan
The Company has a 401(k) salary deferral program for eligible employees who have met certain service requirements. The Company
matches certain employee contributions; additional contributions to this plan are at the discretion of the Company. Total contribution
expense under this plan was $5.2 million for 2005, $5.0 million for 2004 and $8.7 million for 2003.
NOTE 22—REGULATORY REQUIREMENTS
Registered Broker-Dealers
The Company’s broker-dealer subsidiaries are subject to the Uniform Net Capital Rule (the “Rule”) under the Securities Exchange Act
of 1934 administered by the SEC, the New York Stock Exchange (“NYSE”) and the NASD, which requires the maintenance of minimum
net capital. The minimum net capital requirements can be met under either the Aggregate Indebtedness or the Alternative method.
Under the Aggregate Indebtedness method, a broker-dealer is required to maintain minimum net capital of at least the greater of 6
2
/
3
%
of its aggregate indebtedness, as defined, or a minimum dollar amount. Under the Alternative method, a broker-dealer is required to
maintain net capital of at least 5% of aggregate debit balances or a minimum dollar amount. Broker-dealers who do not meet one of
these requirements may not repay subordinated borrowings, pay cash dividends or make any unsecured advances or loans to its
parent or employees.
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2006. EDGAR Online, Inc.