Metro PCS 2007 Annual Report Download - page 129

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MetroPCS Communications, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2007, 2006 and 2005
F-30
The following table summarizes information about stock options outstanding at December 31, 2007:
Options Outstanding Options Vested
Exercise Price
Number of
Shares
Weighted
Average
Contractual
Life
Weighted
Average
Exercise
Price
Number of
Shares
Weighted
Average
Exercise
Price
$0.08 - $4.97.................................................................. 4,625,193 4.36 $ 1.68 4,595,786 $ 1.66
$5.47 - $7.15.................................................................. 7,559,102 7.49 $ 6.91 4,822,050 $ 6.83
$7.54 - $8.67.................................................................. 854,814 8.41 $ 8.05 315,732 $ 8.04
$11.33 - $11.33.............................................................. 7,349,100 8.84 $ 11.33 2,040,000 $ 11.33
$15.10 - $17.23.............................................................. 647,600 9.87 $ 15.68 — $ 0.00
$23.00 - $36.58.............................................................. 6,607,985 9.32 $ 24.71 131,417 $ 23.74
In 2004, Congress passed the American Job Creation Act of 2004 which changed certain rules with respect to
deferred compensation, including options to purchase MetroPCS’ common stock which were granted below the fair
market value of the common stock as of the grant date. MetroPCS had previously granted certain options to
purchase its common stock under the 1995 Plan at exercise prices which MetroPCS believes were below the fair
market value of its common stock at the time of grant. In December 2005, MetroPCS offered to amend the stock
option grants of all affected employees by increasing the exercise price of such affected stock option grants to the
fair value of MetroPCS’ common stock as of the date of grant and granting additional stock options which vested
50% on January 1, 2006 and 50% on January 1, 2007 at the fair market value of MetroPCS’ common stock as of the
grant date provided that the employee remained employed by the Company on those dates. The total number of
affected stock options was 2,617,140 and MetroPCS granted 407,274 additional stock options.
During the year ended December 31, 2007, 2,562,056 options granted under the Option Plans were exercised for
2,562,056 shares of common stock. The intrinsic value of these options was approximately $47.7 million and total
proceeds were approximately $9.7 million for the year ended December 31, 2007. During the year ended
December 31, 2006, 1,148,328 options granted under the Option Plans were exercised for 1,148,328 shares of
common stock. The intrinsic value of these options was approximately $9.0 million and total proceeds were
approximately $2.7 million for the year ended December 31, 2006. During the year ended December 31, 2005,
22,669,671 options granted under the Option Plans were exercised for 22,669,671 shares of common stock. The
intrinsic value of these options was approximately $152.8 million and total proceeds were approximately
$8.6 million for the year ended December 31, 2005.
In October 2005, Madison Dearborn Capital Partners and TA Associates consummated a tender offer in which
they purchased from existing stockholders shares of Series D Preferred Stock and common stock in MetroPCS. In
connection with this transaction, 22,102,287 options granted under the Option Plans were exercised for
22,102,287 shares of common stock. MetroPCS received no proceeds from this transaction.
The following table summarizes information about unvested stock option grants:
Stock Option Grants
Shares
Weighted
Average
Grant-Date
Fair Value
Unvested balance, January 1, 2007....................................................................................... 14,633,949 $ 3.60
Grants ................................................................................................................................... 8,476,998 $ 9.89
Vested shares........................................................................................................................ (5,677,364) $ 3.76
Forfeitures ............................................................................................................................ (1,694,774) $ 4.76
Unvested balance, December 31, 2007................................................................................. 15,738,809 $ 6.99
The Company determines fair value of stock option grants as the share price of the Company’ s common stock at
grant-date. The weighted average grant-date fair value of the stock option grants for the year ended December 31,
2007, 2006 and 2005 is $9.89, $3.98 and $2.93, respectively. The total fair value of stock options that vested during
the year ended December 31, 2007 was $21.3 million.