Options under the 1991 Plan expire five years after the date of grant. During October 1995, employees and officers holding options to purchase shares of the Company's Common stock were offered the opportunity to exchange their existing options for the same number of options at the then current market price. Under the terms of the program, options to purchase 395,000 shares of the Company's Common Stock were exchanged and are reflected in grant and cancelation activity for fiscal 1995. Under the Directors' Plan the Company is authorized to issue nonqualified stock options to purchase up to 175,000 shares of the Company's Common Stock at an exercise price equal to the fair market value of the Common Stock on the date of grant. Options granted under the Directors' Plan generally have a term of ten years.
Options are immediately exercisable and expire five years from the date of grant.
All options and shares are held in a trust until the later of 24 months from the date of grant or the shares are vested based on a vesting schedule determined by a committee appointed by the Board of Directors. Nonvested shares are subject to repurchase by the Company at the original issuance price. An aggregate of 350,000 shares of the Company's common stock have been reserved for issuance under the 1993 Purchase Plan. Under APB Opinion No. 25, because the exercise price of the Company's stock options generally equals the market price of the underlying stock on the date of grant, no compensation expense is recognized. The Company does not recognize compensation cost related to employee purchase rights under the Plan.