Teecee, it is not the $500K-$700K we are discussing. It is the RSU's (Restricted Stock Units), that were granted at $0 cost to the receiver. This is what was excessive.
Divya
I am copying Ronnie's post explaining this:
Olddog re restricted shares and RSUs to Harry you said:
..."I believe your count of 305,000 RSUs awarded to Mr. Campagna through Apr 7, 03, is understated by 40,000. You might have missed the tax gross up award in the 2001 proxy. Also, based on reported awards, it appears that there is no standard vesting period."
When I first saw this, I thought that you were double-counting the 40,000 RSUs granted to Harry in 2000. However after rereading the proxy, I now agree with you in that there were two separate RSU grants to Harry of 40,000 each in 2000. The expanded passage from the 2001 proxy as follows:
..."In connection with his service and extra commitment of time as Chairman of the Board during 2000, Mr. Campagna was awarded 40,000 restricted stock units under the Company's 1999 Restricted Stock Plan (RSUs) in 2000 and 100,000 RSUs in 2001. In connection with his service on the Board during 2000, Mr. Roath was awarded 10,000 options to purchase Common Stock in 2000 under the Company's 1997 Stock Option Plan for Outside Directors and 20,000 RSUs in 2001. During 2000 each of the Outside Directors was awarded RSUs in exchange for the relinquishment of a tax gross-up feature associated with previously granted restricted stock. The number of such RSUs were as follows: Mr. Campagna, 40,000; Mr. Colson, 12,000; Mr. Clontz, 12,000; and Mr. Roath, 12,000. The RSUs do not carry voting rights.
The first referenced 40,000 RSUs granted to Harry in 2000 pertain to his compensation received as Chairman of the Board. The second referenced 40,000 RSUs granted to Harry in 2000 were for the surrendering of the tax gross-up feature associated with 40,000 shares of restricted stock granted to him in 1999.
There is a difference between the resticted shares granted in 1999, and the restricted stock units RSUs granted in 2000 and thereafter. The restricted stock had, in addition to an initial tax gross-up feature, the right to receive dividends and evidently the right to vote, and thus counted as actual shares owned. RSUs evidently do not have the tax gross-up feature, have no voting or dividend rights, and do not count in the actual shares owned or outstanding shares.
I was incorrectly including the resticted shares in my RSU total, and did not include the 40,000 tax gross-up RSUs in my total. Therefore through April 2003, technically Harry has received 305,000 total RSUs and 40,000 restricted shares as compensation for Chairman of the Board. He did not surrender the restricted stock itself, only the tax gross-up feature thereon. In addition to the RSUs and restricted shares he has also received 585,000 stock options as Chairman of the Board, since becoming board chairman in 1996. I also estimate that Harry has received 233,725 additional stock options and warrants for services as an outside director.
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