NetFlix 2008 Annual Report Download - page 71

NETFLIX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
ESPP, therefore, the look-back for determining the purchase price is six months. Employees may invest up to
15% of their gross compensation through payroll deductions. In no event shall an employee be permitted to
purchase more than 8,334 shares of common stock during any six-month purchase period. During the years
ended December 31, 2008, 2007 and 2006, employees purchased approximately 231,068, 205,416 and 378,361
shares at average prices of $21.00, $18.43 and $9.84 per share, respectively. Cash received from purchases under
the ESPP for the years ended December 31, 2008, 2007 and 2006 was $4.9 million, $3.8 million and $3.7
million, respectively. As of December 31, 2008, 2,399,863 shares were available for future issuance under the
2002 Employee Stock Purchase Plan.
Stock Option Plans
In December 1997, the Company adopted the 1997 Stock Plan, which was amended and restated in October
2001. The 1997 Stock Plan provides for the issuance of stock purchase rights, incentive stock options or
non-statutory stock options. In November 2007, the 1997 Stock Plan expired and, as a result, there were no
shares reserved for future issuance upon the exercise of outstanding options under the 1997 Stock Plan as of
December 31, 2008.
In February 2002, the Company adopted the 2002 Stock Plan, which was amended and restated in May
2006. The 2002 Stock Plan provides for the grant of incentive stock options to employees and for the grant of
non-statutory stock options and stock purchase rights to employees, directors and consultants. As of
December 31, 2008, 3,192,515 shares were reserved for future grant under the 2002 Stock Plan.
A summary of the activities related to the Company’s options is as follows:
Shares Available
for Grant
Options Outstanding Weighted-Average
Remaining
Contractual Term
(in Years)
Aggregate
Intrinsic Value
(in Thousands)
Number of
Shares
Weighted-Average
Exercise Price
Balances as of December 31, 2005 .... 4,582,833 5,854,816 10.43
Authorized ................... 2,000,000 — —
Granted ..................... (1,043,910) 1,043,910 25.70
Exercised .................... — (1,379,012) 6.07
Canceled .................... 66,261 (66,261) 28.56
Balances as of December 31, 2006 .... 5,605,184 5,453,453 14.23
Granted ..................... (1,103,522) 1,103,522 21.72
Exercised .................... — (828,824) 7.03
Canceled .................... 108,513 (108,513) 29.46
Expired ..................... (615,309) — —
Balances as of December 31, 2007 .... 3,994,866 5,619,638 16.47
Granted ..................... (856,733) 856,733 27.98
Exercised .................... — (1,056,641) 13.27
Canceled .................... 54,714 (54,714) 28.88
Expired ..................... (332) — —
Balances as of December 31, 2008 .... 3,192,515 5,365,016 18.81 6.36 61,503
Vested and exercisable at December 31,
2008 .......................... 5,365,016 18.81 6.36 61,503
The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference
between the Company’s closing stock price on the last trading day of 2008 and the exercise price, multiplied by
the number of in-the-money options) that would have been received by the option holders had all option holders
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