This excerpt taken from the ORB DEF 14A filed Mar 13, 2007.
As discussed in Compensation Discussion and Analysis Elements of Our Compensation Program Base Salary on page 15, our Named Executive Officers base salaries increased by an average of 4.5% over 2005 base salary levels. These salaries are reflected in the Salary column of the Summary Compensation Table on page 18.
In 2006, James R. Thompson elected to receive approximately 25% of his 2006 base salary, net of taxes, in the form of common stock that is not subject to any vesting restrictions. For the first and second quarters of the fiscal year ended December 31, 2006, the amount of shares issued was equal to (1) the dollar value of his net salary for each calendar quarter, divided by (2) the average closing price of our common stock during such calendar quarter. For the third and fourth quarters of the fiscal year ended December 31, 2006, the amount of shares issued was equal
to (1) the dollar value of his net salary for each calendar quarter, divided by (2) the closing price of our common stock on the grant date, such grant date being the last trading day of the applicable quarter. The value of the common stock received by Mr. Thompson was approximately equal to the amount of salary foregone at his election, subject to any de minimus difference due to the rounding of fractional shares.
In addition, during 2006, each Named Executive Officer earned a performance-based annual cash incentive award under the MIP, which is reflected in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table on page 18. See Compensation Discussion and Analysis Elements of Our Compensation Program Annual Cash Incentive Awards and Special Cash Bonuses beginning on page 15 for a detailed discussion of the MIP and how 2006 bonuses under the MIP were determined. In addition to the bonuses payable to Mr. Grabe discussed above, he received a discretionary $20,000 bonus in recognition of his long-term relocation to Chandler, Arizona.
With respect to equity grants during 2006, Messrs. Thompson, Pierce, J.R. Thompson and Grabe received grants of RSUs under our 2005 Stock Incentive Plan, and Mr. Marchetto received a grant of RSUs under our 1997 Stock Option and Incentive Plan. See footnotes 3 and 5 to the Grants of Plan-Based Awards table on pages 20-21 for the amounts, vesting schedule, and material terms of these RSU awards. See Compensation Discussion and Analysis Elements of Our Compensation Program Equity-Based Compensation beginning on page 16 for a discussion of our practices with respect to equity grants.
In December 2006, we amended the exercise prices of certain stock options previously granted to Messrs. J.R. Thompson and Grabe with exercise prices below the fair market value per share of our common stock on the grant measurement dates for such options for accounting and tax purposes. To avoid certain tax consequences under Section 409A of the Internal Revenue Code, Messrs. J.R. Thompson and Grabe entered into amendments with us to increase the exercise prices of these stock options to reflect the fair market value per share on the applicable grant measurement dates, and thus, no incremental fair value resulted from the amended stock options. No other terms and conditions of these stock options were amended.