-5-
Mr. Facq’s margin account was secured by the shares he would
receive, to be held in the margin account. If the value of the
shares in the margin account decreased below a certain level,
Hambrecht and Quist was authorized (pursuant to the Margin Loan
Agreement, and NASD and SEC rules) to sell the shares to repay
the amount Mr. Facq owed. Mr. Facq was personally liable for
repayment of any shortfall.
In 2000, Mr. Facq used his Hambrecht and Quist account on
several occasions to borrow money to exercise the options.6 Mr.
Facq’s purchases in 2000 are shown in the table below, which also
indicates the exercise prices and the amount of withholding taxes
for each purchase funded through the margin account.
Purchase Shares Tax Market Value
Purchased Exercise
Date Price Withholding of Shares
Feb. 7, 2000 56,000 $140 $1,289,589.25 $4,364,500.00
Feb. 15, 2000 144,000 360 4,252,621.23 14,440,500.00
Mar. 7, 2000 100,000 500 7,718,382.64 18,870,429.60
Apr. 17, 2000 200,000 500 2,650,352.75 9,000,000.00
May 24, 2000 200,000 500 2,723,977.75 9,250,000.00
July 28, 2000 50,000 93,750 -- 1,593,750.00
6The number of shares Mr. Facq purchased is not consistent
with the initial number of shares InfoSpace granted Mr. Facq
because stock splits occurred between the grant of the options
and when Mr. Facq exercised them.
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Last modified: May 25, 2011