IPAS » Topics » Compensation of Directors

This excerpt taken from the IPAS DEF 14A filed Apr 26, 2006.
Compensation of Directors
 
The members of our board of directors who are not employees of iPass are reimbursed for travel, lodging and other reasonable expenses incurred in attending board or committee meetings. In addition, our non-employee directors receive the following cash compensation for services as a non-employee director:
 
         
Annual cash retainer
  $ 20,000  
Committee chairman annual retainer
  $ 5,000  
Per meeting board meeting fees
  $ 1,000  
Per meeting committee meeting fees
  $ 1,000  
 
Prior to February 9, 2006, our non-employee directors only received the per meeting fees referenced above, and did not receive any annual retainers. Prior to March 23, 2005, our non-employee directors only received a per committee meeting fee of $750, and no other cash compensation.
 
Under our 2003 Non-Employee Directors Plan, as amended (which we refer to as the “Directors Plan”), assuming the stockholders approve Proposal 2 set forth above, any new non-employee director upon joining our board of directors will receive an option to purchase 30,000 shares of our common stock and 10,000 shares of our restricted common stock and each non-employee director will receive an annual option grant to purchase 15,000 shares of our common stock and 5,000 shares of our restricted common stock thereafter. If Proposal 2 is not adopted, then the Directors Plan will remain as currently in effect, and any new non-employee director upon joining our board of directors will receive an option to purchase 120,000 shares of our common stock and no shares of our restricted common stock, and each non-employee director will receive an annual option grant to purchase 30,000 shares of our common stock and no shares of our restricted common stock thereafter. Annual option grants to non-employee directors who have not served on our board of directors for the entire period preceding the annual meeting shall be reduced, pro rata, for each month this person did not serve on the Board of Directors. No other options or restricted stock awards may be granted at any time under the Directors Plan. The exercise price of options granted under the Directors Plan is 100% of the fair market value of the common stock subject to the option on the date of the option grant. Options granted under the Directors Plan may not be exercised until vested. The initial option and restricted stock grants vest monthly over four years and the annual option and restricted stock grants vest monthly over one year beginning on the third anniversary of the date of grant. The term of options granted under the Directors Plan is indefinite. In the event of a merger of iPass with or into another corporation or a consolidation, acquisition of assets or other change-in-control transaction involving iPass, the vesting of each option and restricted stock award will accelerate and be fully vested and each option will be immediately exercisable.
 
Under Directors Plan, in June 2005, Messrs. Ames, Beletic, Bodine, Patterson and Spies each received an option to purchase 30,000 shares of our common stock at an exercise price of $6.24 per share. On April 3, Mr. Pripp received an option to purchase 30,000 shares of our common stock at an exercise price of $8.01 per share under our Directors Plan.


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Table of Contents

Compensation of Directors
      The members of our board of directors who are not employees of iPass are reimbursed for travel, lodging and other reasonable expenses incurred in attending board or committee meetings. In addition, our non-employee directors received $750 for each committee meeting attended. In 2004, members of our board of directors did not receive cash compensation for attending board meetings.
      In 2005, each member of our board of directors will receive $1,000 for each committee and board meeting attended. In June 2004, Messrs. Ames, Baumbaugh, Beletic, Bodine, Patterson and Spies each received an option to purchase 30,000 shares of our common stock at an exercise price of $10.44 per share as compensation for attendance at our board and committee meetings. These options vest in equal monthly installments over a period of one year beginning on the third anniversary of the date of grant. Under our 2003 Non-Employee Directors Plan (which shall be referred to as the “Director’s Plan”), any new non-employee director upon joining our board of directors will receive an option to purchase 120,000 shares of our common stock and each non-employee director will receive an annual option grant to purchase 30,000 shares of our common stock thereafter. Annual Option grants to Non-employee directors who have not served on our board of directors for the entire period preceding the annual meeting shall be reduced, pro rata, for each month this person did not serve on the Board of Directors. No other options may be granted at any time under the Directors’ Plan. The exercise price of options granted under the Directors’ Plan is 100% of the fair market value of the common stock subject to the option on the date of the option grant. Options granted under the Directors’ Plan may not be exercised until vested. The initial option of 120,000 shares vests monthly over four years and the annual option grant of 30,000 shares vests monthly over one year beginning on the third anniversary of the date of grant. The term of options granted under the Directors’ Plan is indefinite. In the event of a merger of iPass with or into another corporation or a consolidation, acquisition of assets or other change-in-control transaction involving iPass, the vesting of each option will accelerate and the option will be fully vested and immediately exercisable.
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