TABLE OF CONTENTS
NYFIX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. Stockholders Equity (continued)
form of liquidated damages in the amount of 5% of the aggregate purchase price. In the fourth quarter of 2006, the Company recorded a charge of $631,000 (which was paid in April 2007) as a result of not meeting these filing requirements.
Preferred Stock Dividends
During January and June 2007, the Board of Directors declared dividends payable to holders of Series B Preferred Stock in payment of dividends accumulated through December 31, 2006 and June 30, 2007, respectively. As a result, the Company issued 227,500 and 526,327 restricted shares of common stock, with fair values of approximately $1,354,000, and $3,426,000, respectively, based on the market price of its common stock on the respective declaration dates. Also in 2007, the Board of Directors declared dividends payable January 2, 2008, to holders of Series B Preferred Stock in payment of dividends accumulated through December 31, 2007. As a result,
the Company issued 525,000 restricted shares of common stock in January 2008, with fair values of approximately $2,441,000, based on the market price of its common stock on the declaration date.
During June and December 2008, the Board of Directors declared dividends payable to holders of Series B Preferred Stock in payment of dividends accumulated through June 30, 2008 and December 31, 2008, respectively. As a result, the Company issued 525,000 shares of common stock in both periods, with a fair value of approximately $1,969,000 and $278,000, respectively, based on the market price of its common stock on the respective declaration dates.
All accumulated dividends declared in 2007 and 2008 are reflected as a charge to loss applicable to common stockholders in calculating the basic and diluted loss per common share (see Note 14).
Other Uses and Repurchases Common Stock and Treasury Stock
During 2006, the Company issued 40,491 shares from treasury stock with an aggregate market price of $191,000 as a scheduled payment to the remaining noteholders of the Renaissance promissory notes. In August 2006, the Company issued 14,021 shares from treasury stock to a EuroLink promissory noteholder as final payment towards the note with an aggregate market value agreed in April 2005 of $67,000. The excess of the average cost of treasury shares over the fair value of such shares on the reissuance dates during 2006, or $522,000, was charged directly to retained earnings.
During 2007, the Company issued 48,169 restricted shares of common stock from treasury to an officer in satisfaction of his employment agreement requiring issuance of shares with a fair market value of $300,000. The fair value of such shares of $300,000 has been charged to stock-based compensation expense pro rata over the requisite service period. The excess of the average cost of these treasury shares over the fair value of such shares on the grant date was charged to retained earnings at the conclusion of the requisite service period. During March 2008, the restrictions on these shares expired. Shares totaling 16,282 were returned to the Company
to settle employee tax liabilities as a result of this transaction, and these shares were returned to treasury.
In July 2007, the Company issued 26,954 shares from treasury stock with an aggregate market price of $193,000 as final payment on the Renaissance acquisition related promissory notes.
During 2007, stock options aggregating 336,175 shares were exercised. Included in this amount were options covering 225,000 shares held by an accredited investor (and former executive officer), which were exercised at $2.00 per share. The $450,000 aggregate exercise price of such shares was paid for with the delivery of 73,171 shares of common stock previously held by the former executive officer for more than six months. The receipt of these shares is reflected in treasury stock. The Company then issued 225,000 restricted shares of common stock from treasury, on that same day, with a fair market value of $6.15 per share on the exercise date. The
excess of the average cost of these treasury shares over the exercise proceeds