Intersections Inc. (Nasdaq:INTX) today announced thatits Board of Directors has approved the acceleration of the vesting ofcertain unvested stock options previously awarded under the company's2004 Stock Option Plan. All other terms and conditions applicable tosuch options, including the exercise prices, remain unchanged.
As a result of this action, options to purchase up toapproximately 980,000 shares of common stock, which would otherwisehave vested over the next 3 years, may become exercisable effectiveDecember 31, 2005. All of these options have exercise prices rangingfrom $13.00 to $17.82 per share. Based upon the closing stock pricefor the company's common stock of $8.64 per share on December 16,2005, all of these options are "under water" or "out-of-the-money". Ofthe accelerated options, approximately 659,000 options are held byexecutive officers and approximately 23,000 options are held bynon-employee directors. Outstanding options to purchase approximately23,000 shares of Intersections' common stock, with per share exerciseprices ranging from $8.79 to $10.85, were not accelerated and remainsubject to time-share vesting.
Under the recently issued Statement of Financial AccountingStandards No. 123R, "Share-Based Payment" (SFAS 123R), Intersectionswill be required to apply the expense recognition provisions beginningJanuary 1, 2006. As a result of the acceleration, Intersectionsexpects to eliminate anticipated stock option expense of approximately$1.6 million in each of 2006 and 2007 and approximately $650,000 in2008 on a pre-tax basis, based upon the company's value calculationsusing the Black-Scholes methodology.
"The Board of Directors took the action with the belief that it isin the best interest of our stockholders," said Michael R. Stanfield,the Chairman and Chief Executive Officer. "The Board considered theoverall impact that accelerating the vesting will have on theretention value to our employees associated with these out-of-themoney options. Moreover, the Board of Directors is reviewing thecompany's continued use of stock options and considering the potentialissuance of restricted stock or restricted stock units as part of thecompany's overall equity compensation approach."
Statements in this press release relating to future plans,results, performance, expectations, achievements and the like areconsidered "forward-looking statements." Those forward-lookingstatements involve known and unknown risks and are subject to changebased on various factors and uncertainties that may cause actualresults to differ materially from those expressed or implied by thosestatements, including without limitation the effect of new subscriberadditions. Factors and uncertainties that may cause actual results todiffer include but are not limited to the risks disclosed in theCompany's filings with the U.S. Securities and Exchange Commission.The Company undertakes no obligation to revise or update anyforward-looking statements.
About Intersections Inc.
Intersections Inc. is the leading provider of branded andfully-customized consumer credit management and identity theftdetection, protection and resolution services to the customers of manyof North America's largest financial services companies. Byintegrating our technology solutions, marketing capabilities, andend-to-end production and fulfillment infrastructure, we assist thesecompanies in meeting the needs of their customers in a secure,efficient and ethical environment. We currently provide our consumerservices to more than 3.4 million subscribers in the U.S. and Canada,primarily through our partners, as well as direct-to-consumer throughour Identity Guard(R) brand. Intersections also offers enterpriseservices, including pre-employment background screening, which isprovided through our wholly-owned subsidiary, American BackgroundInformation Services Inc. Learn more about Intersections atwww.intersections.com.
