The following table sets forth all compensation paid
to each of our non-employee directors in 2006:
Name
Fees Earned
or Paid in Cash
($)
Option Awards
($)
(3)
Total
($)
Peter M. Gotsch
(1)
—
—
—
I. Stewart
Farwell
(2)
19,000
55,567
74,567
Robert G. Hogan
(1)
—
—
—
Wilson B. Sexton
(2)
22,000
50,167
72,167
William H.
Sheffield
(2)
19,000
50,580
69,580
Scott L.
Thompson
(2)
23,500
55,567
79,067
(1)
Messrs. Gotsch, Hogan and Sorrentino do not receive
any directors’ fees or option grants for their service as directors.
(2)
Terms of Office
. Mr. Farwell was
elected as a director effective July 19, 2006, Mr. Sexton was
elected as a director on May 11, 2006, Mr. Sheffield was elected as
a director on August 11, 2006 and Mr. Thompson was elected as a director
on July 19, 2006.
(3)
Option
Awards
. This column shows the
dollar amount we recognized for financial statement reporting purposes in
2006 in accordance with SFAS No. 123(R) for all option awards
granted to each non-employee director. See footnote 8 to the Consolidated
Financial Statements contained elsewhere in this prospectus for a discussion
of the assumptions we made in the valuation of these restricted stock unit
awards. The grant date fair value of each option award listed in this column is
as follows: Mr. Farwell, $123,777 (related to option to purchase
15,000 shares granted on July 19, 2006); Mr. Sexton, $95,054
(related to option to purchase 15,000 shares granted on May 11, 2006);
Mr. Sheffield, $130,667 (related to option to purchase 15,000 shares
granted on August 11, 2006); and Mr. Thompson, $123,777 (related to
option to purchase 15,000 shares granted on July 19, 2006). As of the
date of this prospectus, each non-employee director holds the following
number of stock options: Mr. Gotsch—0; Mr. Farwell—15,000;
Mr. Hogan—0; Mr. Sexton—15,000; Mr. Sheffield—15,000 and Mr.
Thompson—15,000.
Perquisites paid
or provided to directors in 2006 were significantly less than the SEC’s minimum
threshold for disclosure ($10,000).
Independent members
of the board of directors receive an annual retainer of $30,000, paid
quarterly. All independent directors are also entitled to receive $1,500 for
each board meeting attended and $1,000 for each committee meeting, with half
the applicable amount paid in connection with a telephonic meeting. The
chairman of each of the audit committee and compensation committee is entitled
to receive an additional $5,000 per year. All fees may be paid in cash or
shares of our common stock, at the choice of the director.
In addition, upon
election to the board, each independent director receives a one-time grant of
an option exercisable for 15,000 shares of our common stock. Upon
reelection, independent directors also receive an annual grant of an option
exercisable for 5,000 shares. All options become exercisable one year
after the date of grant. Exercise prices are set at fair market value at the
date of grant. Options may be forfeited in the event the director terminates,
other than by retirement, his or her relationship with us. During 2006,
Messrs. Farwell, Sexton, Sheffield and Thompson each received a grant of
an option exercisable for 15,000 shares upon his election to the board.
We reimburse
members of our board of directors for any out-of-pocket expenses they incur in
connection with services provided as directors.
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