At a special meeting held on December 21, 2007, the Board of Directors of the Company, upon the recommendation of its Compensation Committee, granted an option pursuant to the Company's Employee Equity Incentive Plan to the Company's President and Chief Executive Officer, Martin F. Roper, for up to 800,000 shares of the Company's Class A Common Stock (the "Option"). The Option is effective on January 1, 2008 and provides for a variable exercise price determined by multiplying $42.00, or, if greater, the closing price of the underlying shares on December 31, 2007, by the aggregate change in the DJ Wilshire 5000 Index (or in a successor broad market index selected by the Compensation Committee of the Company's Board of Directors, if the DJ Wilshire 5000 Index ceases to exist) from and after January 1, 2008 through the close of business on the trading date next preceding each date on which Mr. Roper exercises the Option. The exercise price is subject to further increase, s o that the spread between the exercise price and the fair market value of the shares as to which the Option is being exercised, determined as the close of business on the trading date next preceding each date on which Mr. Roper exercises the Option, is capped at $70.00. The minimum exercise price will in all events be the closing price of the underlying shares on December 31, 2007. The Option will vest over a five-year period, commencing on January 1, 2014, at the rate of 20% per year, subject to acceleration pursuant to a defined schedule in the event of a change of ownership of the Company's Class B Common Stock. The number of shares subject to the Option will be fixed on the effective date of the grant, based on the closing price of the underlying shares on December 31, 2007, such that the value of the Option, as determined as of the effective date using the Monte Carlo simulation valuation methodology recommended by an independent consultant hired by the Company for purposes of valuing the Option, does n ot exceed $6.34 million. In any event, the number of shares subject to the Option will not exceed 800,000 shares. |
Based on the Compensation Committee's recommendation, the Company's Board of Directors, also at its meeting on December 21, 2007, amended the Company's Employee Equity Incentive Plan (the "Plan"), to increase the number of shares of the Company's Class A Common Stock issuable under the Plan by 1,000,000 shares. The amendment has been approved by the sole holder of the Company's Class B Common Stock. |
