eTrade 2008 Annual Report Download - page 146

A summary of non-vested restricted stock unit activity is presented below:
Units
(in thousands)
Weighted-Average
Remaining
Contractual Life
Aggregate
Intrinsic Value
(in thousands)
Outstanding at December 31, 2007 113 1.56 $ 390
Issued 6,929
Released (1,358)
Canceled (689)
Outstanding at December 31, 2008 4,995 0.64 $5,669
Vested and expected to vest at December 31, 2008 4,543 0.58 $5,156
As of December 31, 2008, there was $16.7 million of total unrecognized compensation cost related to
non-vested awards. This cost is expected to be recognized over a weighted-average period of 1.0 year. The total
fair value of restricted shares and restricted stock units vested was $5.6 million, $11.0 million and $7.5 million
for the years ended December 31, 2008, 2007 and 2006, respectively.
Employee Stock Purchase Plan
The shareholders of the Company previously approved the 2002 Employee Stock Purchase Plan (“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. Effective August 1, 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 August 1, 2005. In 2008, the Company temporarily suspended the 2002 Purchase Plan
due to the low number of shares remaining for issuance. At December 31, 2008, 212,650 shares were available
under the 2002 Purchase Plan.
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 from continuing operations under this plan was $4.6
million, $5.4 million and $5.3 million for the years ended December 31, 2008, 2007 and 2006, respectively.
NOTE 21—REGULATORY REQUIREMENTS
Registered Broker-Dealers
The Company’s U.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 and FINRA, which requires the maintenance of
minimum net capital. The minimum net capital requirements can be met under either the Aggregate Indebtedness
method or the Alternative method. Under the Aggregate Indebtedness method, a broker-dealer is required to maintain
minimum net capital of 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 equal to the greater of $250,000 or
2% of aggregate debit balances arising from customer transactions. The method used depends on the individual U.S.
broker-dealer subsidiary. The Company’s international broker-dealer subsidiaries, located in Europe and Asia, are
subject to capital requirements determined by their respective regulators.
As of December 31, 2008, all of the Company’s broker-dealer subsidiaries met minimum net capital
requirements. Total required net capital was $0.1 billion at December 31, 2008. In addition, the Company’s
broker-dealer subsidiaries had excess net capital of $0.7 billion at December 31, 2008.
143