Common use of Outstanding Stock Options Clause in Contracts

Outstanding Stock Options. o As of April 11, 2002 there were options outstanding to acquire 6,411,223 shares of LendingTree, Inc. common stock. OUTSTANDING COMMON STOCK WARRANTS o As of April 11, 2002 there were warrants to acquire 399,710 shares of LendingTree, Inc. common stock outstanding. COMMON STOCK ISSUABLE UPON CONVERSION OF SERIES A PREFERRED STOCK o As of April 11, 2002 the 6,842,858 outstanding shares of Series A Preferred Stock were convertible into 7,489,443 shares of LendingTree, Inc. common stock. Pursuant to the Certificate of Designations, Preferences and Rights of Series A 8% Convertible Preferred Stock of LendingTree, Inc., the holders of the Series A Preferred Stock have certain preemptive rights. See Schedule 3.4. The holders of Series A Preferred Stock also have certain redemption rights pursuant to the Certificate of Designations. COMMON STOCK RESERVED FOR ISSUANCE o LendingTree, Inc. has an Employee Stock Purchase Plan, under which a total of 550,000 shares of LendingTree, Inc. common stock have been reserved for issuance. As of April 11, 2002, a total of 286,975 shares have been issued under this plan. o LendingTree, Inc. maintains the 1997 Stock Option Plan, the 1998 Stock Option Plan, the 1999 Stock Option Plan and the 2001 Stock Incentive Plan under which there are, as of April 11, 2002, a combined 1,322,846 shares of Common Stock available for the grant of options in the future. TREASURY STOCK o As of April 11, 2002 there were 664,321 shares of issued, but not outstanding shares of LendingTree common stock accounted for as Treasury Stock of LendingTree, Inc. POTENTIALLY ISSUABLE SECURITIES LendingTree, Inc. and the Federal Home Loan Mortgage Corporation are parties to a credit facility agreement requires that a portion of the quarterly interest payments be in the form of warrants to purchase our common stock at an exercise price of $.01 per share. The amount of warrants to be issued will be calculated by dividing the amount of interest to be paid in the form of warrants by $3.99. The amount of interest expense that we will record will be based upon the estimated fair value of the warrants on the date that they are issued. As of April 11, 2002, no amounts had been borrowed under this facility and no warrant-based interest charges had been incurred. The Federal Home Loan Mortgage Corporation would also be entitled to additional warrants if LendingTree, Inc. issues any shares of common stock or convertible securities at a price less than the fair market value per share of common stock. Under our 2001 Stock Incentive Plan, each non-employee director who is a beneficial owner of (or represents an organization that is a beneficial owner of) less than 5% of our combined voting power, upon his or her initial election to the board, is granted a non-qualified stock option to purchase a number of shares of common stock calculated by dividing $66,000 by one-third of the average closing price of the common stock for five trading days immediately preceding the grant date. Additionally, immediately following each annual meeting of the company's stockholders, each such non-employee director then serving is granted a non-qualified stock option to purchase a number of shares of our common stock, calculated by dividing $22,000 by one-third of the average closing price of our common stock for five trading days immediately preceding the grant date. In lieu of the annual option grants, directors may elect to receive an equivalent number of shares of restricted stock. The 2002 Annual Meeting is scheduled for April 24, 2002, at which time, 6 directors will be eligible for the compensation noted above.