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Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
VMware Restricted Stock
VMware restricted stock includes restricted stock awards, restricted stock units, and other restricted stock. Other restricted stock includes options
exercised by non-employee directors that were required to be exercised within one year of grant, but are subject to a three-year vesting provision. The exercise
of those options prior to vesting results in the outstanding shares being subject to repurchase and hence restricted until such time as the respective options
vest.
In September 2008, VMware awarded 5.3 million restricted stock units to certain employees, including a portion for international employees who were
not eligible to participate in the 2008 VMware Exchange Offer and a portion for retention purposes. These awards generally will vest over a three-year or
four-year period. These awards resulted in stock-based compensation expense of $164.5 million to be recognized over the three-year or four-year vesting
term.
The following table summarizes restricted stock activity since January 1, 2007 for VMware restricted stock (shares in thousands):
Number of
Shares
Weighted
Average
Grant
Date Fair
Value
Restricted stock at January 1, 2007 — $ —
Granted 596 39.99
Exchanged from EMC restricted stock 2,872 21.48
Exercised stock options, subject to repurchase 120 23.00
Vested (5) 20.24
Forfeited (18) 20.19
Outstanding, December 31, 2007 3,565 24.64
Granted 6,619 35.14
Vested (2,153) 22.58
Forfeited (405) 61.90
Outstanding, December 31, 2008 7,626 $ 32.35
The total fair value of restricted stock that vested in 2008 and 2007 was $116.3 million and $0.6 million, respectively. As of December 31, 2008,
7.6 million shares of VMware restricted stock were outstanding, with an aggregate intrinsic value of $178.8 million. These shares are scheduled to vest
through 2012.
The restricted stock awards are valued based on the VMware stock price on the date of grant. The majority of VMware's restricted stock awards have pro
rata vesting over three or four years.
97