This excerpt taken from the XIDE DEF 14A filed Jul 27, 2006.
Limits on Plan Awards
If the amendment to the 2004 Plan is approved and the Share Transaction is consummated, a maximum of 7,125,000 shares of our common stock will be available for grants of all equity awards under the 2004 Plan, all of which may be granted as incentive stock options. This represents approximately 11.8% of our diluted common shares after the Share Transaction. If the amendment to the 2004 Plan is approved, but the Share Transaction is not consummated, the maximum would instead be 5,125,000, or approximately 8.5% of our current diluted common shares. In either case, the Board of Directors believes that the increased number represents a reasonable amount of potential equity dilution. The maximum number is subject to adjustment in the event of a stock split, reverse stock split, stock dividend, combination, recapitalization or reclassification or other increase or decrease in the number of issued shares of common stock without receipt of consideration by our company. In the event of any of these occurrences, the Committee may make such adjustments that it
determines to be necessary to prevent dilution or enlargement of benefits intended to be made available under the 2004 Plan.
If the amendment is approved and the Share Transaction is consummated, we will be able to issue up to 1,900,000 shares of common stock pursuant to awards in the form of restricted shares and performance awards and during the term of the 2004 Plan, no participant may receive options for more than 1,500,000 shares (increased from 600,000 by the amendment) and no participant may receive performance awards in a performance period that together exceed 600,000 shares and $2,000,000 in cash. If the amendment is approved, but the Share Transaction is not consummated, the 1,900,000 limit would only be increased to 1,275,000 and the 1,500,000 limit would only be increased to 1,050,000.
Shares delivered under the 2004 Plan may be authorized but unissued shares or shares that we have reacquired or otherwise hold in treasury. To the extent that any award payable in shares of common stock expires, is forfeited, is cancelled, becomes unexercisable or for any other reason is not paid or delivered under the 2004 Plan, the shares subject to that award may be used for subsequent awards to the extent not prohibited by applicable law. Any shares withheld from a participant as full or partial payment to our company of the exercise price or the tax withholding upon grant, exercise, vesting or distribution of an award may also be used for future awards under the 2004 Plan.