| | The
Company offers to its employees an Employee Stock Purchase Plan (“ESPP”) which
allows the employee on a quarterly basis to purchase shares of the Company’s common
stock at the lesser of 85% of the market value on the offering commencement date
or offering termination date. The Company has a qualified and a non-qualified
ESPP, which expire on June 30, 2006. The total number of shares available to employees
to purchase under the qualified plan is 1,194,444, of which 866,444 shares have
been purchased as of December 31, 2005. The total number of shares available to
employees to purchase under the non-qualified plan is 194,444, of which 87,589
shares have been purchased as of December 31, 2005. The
Company has a long-term incentive plan which provides for the issuance of incentive
stock options, non-statutory stock options and certain corresponding stock appreciation
rights. The maximum number of shares of common stock for which options may be
granted is 11,111,111. Options may be granted to directors, officers, outside
consultants and key employees of the Company and may be granted upon such terms
and such conditions as the Compensation Committee of the Company’s Board of Directors
in its sole discretion shall determine. Options vest either 20% per year over
a 4.5 or 5 year life with contractual lives of 5 and 10 years, respectively. The
Company also has options that vest 100% upon grant with contractual lives of 10
years. In no event, however, shall the exercise price be less than the fair market
value on the date of grant. Under a provision of the Company’s stock incentive
plan, participants are allowed to surrender mature shares of the Company’s common
stock for the payment of the option price and minimum statutory taxes associated
with the exercise of options. The shares surrendered must be shares the participant
has held for more than six months. The value of the mature shares surrendered
is based on the closing price of the Company’s common stock on the date of exercise
by the participant. |
