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This excerpt taken from the PNRA DEF 14A filed Apr 13, 2007. Description
of the ESPP
The following is a brief summary of the ESPP and is qualified in
its entirety by reference to the ESPP, a copy of which is
attached as Exhibit A to this proxy statement.
The ESPP gives eligible employees the option to purchase
Class A Common Stock through payroll deductions (which
typically may not exceed 10% of an employee’s prior year
compensation) at 85% of the fair market value of the
Class A Common Stock at the time the option is exercised.
The ESPP limits the number of shares that may be purchased to
20,000 shares per quarter. If option holders exercise
options in any one year for a number of shares in excess of such
maximum, then the number of shares to be purchased by such
option holders is reduced ratably to bring the aggregate number
of shares to be purchased down to the maximum. Any quarterly
installment or portion thereof not exercised expires and may not
be cumulated with subsequently exercised quarterly installments.
A participant may withdraw from the ESPP at any time and the
entire amount credited to his or her payroll deduction account
will be refunded. If a participant terminates employment, his or
her participation in the ESPP ends automatically and the entire
amount credited to his or her account will be refunded.
Eligible
Participants
Generally, employees who are regularly scheduled to work twenty
hours per week during the first ninety days of employment,
except holders of 5% or more of the total combined voting power
of all classes of the Company’s capital stock, are eligible
to participate in the ESPP. Such participation is on a purely
voluntary basis. As of December 31, 2006, approximately
7,530 employees were eligible to participate in the ESPP.
Because participation in the stock purchase plan is voluntary,
we cannot determine the number of shares of common stock to be
purchased in the future by non-executive employees as a group.
However, during the last eight quarterly offering periods, we
have issued an average of 7,000 shares per offering period
under the ESPP. Executive officers may participate in the ESPP.
Plan
Administration and Termination
The ESPP provides for administration by the Compensation and
Stock Option Committee. The Compensation and Stock Option
Committee may terminate the ESPP at any time and amend it in any
respect, except that the Compensation and Stock Option Committee
may not effect a change inconsistent with Section 423 of
the Internal Revenue Code.
Federal
Income Tax Consequences
The following generally summarizes the United States federal
income tax consequences that will arise with respect to
participation in the ESPP and with respect to the sale of shares
of our common stock acquired under the ESPP. This summary is
based on the tax laws in effect as of the date of this proxy
statement. Changes to these laws could alter the tax
consequences described below.
Tax Consequences to Participants. A
participant will not have income upon enrolling in the ESPP or
upon purchasing stock at the end of an offering.
A participant may have both compensation income and capital gain
income if the participant sells stock that was acquired under
the ESPP at a profit (if sales proceeds exceed the purchase
price). The amount of each type of income will depend on when
the participant sells the stock. If the participant sells the
stock more than two years after the commencement of the offering
during which the stock was purchased and more than one year
after the date that the participant purchased the stock, then
the participant will have compensation income equal to the
lesser of:
Any excess profit will be long-term capital gain.
If the participant sells the stock prior to satisfying these
waiting periods, then he or she will have engaged in a
disqualifying disposition. Upon a disqualifying disposition, the
participant will have compensation income equal to the value of
the stock on the day he or she purchased the stock less the
purchase price. If the participant’s profit exceeds the
compensation income, then the excess profit will be a capital
gain. If the participant’s profit is less than the
compensation income, the participant will have a capital loss
equal to the value of the stock on the day he or she purchased
the stock less the sales proceeds. This capital gain or loss
will be long-term if the participant has held the stock for more
than one year, and otherwise will be short-term.
If the participant sells the stock at a loss (if sales proceeds
are less than the purchase price), then the loss will be a
capital loss. This capital loss will be long-term if the
participant has held the stock for more than one year and
otherwise will be short-term.
Tax Consequences to the Company. There will be
no tax consequences to us except that we will be entitled to a
deduction when a participant has compensation income upon a
disqualifying disposition. Any such deduction will be subject to
the limitations of Section 162(m) of the Internal Revenue
Code.
The Board
of Directors Recommends that You Vote “FOR” the
Approval of the Amendment to
Increase the Number of Shares Authorized for Issuance Under the 1992 Employee Stock Purchase Plan from 700,000 to 825,000 and to Grant to our Board of Directors the Power to Designate Subsidiaries whose Employees are Eligible to Participate in the Plan.
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