NetFlix 2011 Annual Report Download - page 69

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The following table summarizes information on outstanding and exercisable options as of December 31,
2011:
Options Outstanding and Exercisable
Exercise Price
Number of
Options
Weighted-Average
Remaining
Contractual Life
(Years)
Weighted-Average
Exercise Price
$ 1.50 – $11.48 310,542 2.22 $ 8.08
$ 11.57 – $18.14 311,566 3.25 14.65
$ 19.34 – $23.48 302,259 5.10 21.52
$ 23.78 – $27.55 300,998 4.62 26.32
$ 28.13 – $34.75 304,110 5.40 30.91
$ 35.36 – $53.80 314,372 6.55 42.35
$ 58.23 – $75.00 308,609 9.07 67.04
$ 80.09 – $113.25 359,849 9.29 98.03
$134.91 – $237.19 298,455 9.09 196.19
$242.09 – $267.99 146,994 9.43 259.98
2,957,754
Employee Stock Purchase Plan
In February 2002, the Company adopted the 2002 Employee Stock Purchase Plan (“ESPP”) under which
employees purchased common stock of the Company through accumulated payroll deductions. The purchase
price of the common stock acquired by the employees participating in the ESPP is 85% of the closing price on
either the first day of the offering period or the last day of the purchase period, whichever was lower. Under the
ESPP, the offering and purchase periods took place concurrently in consecutive six month increments. Therefore,
the look-back for determining the purchase price was six months. Employees could invest up to 15% of their
gross compensation through payroll deductions. In no event was an employee permitted to purchase more than
8,334 shares of common stock during any six-month purchase period.
As of December 31, 2011, there were 2,785,721 shares available for future issuance under the 2002
Employee Stock Purchase Plan. The Company’s ESPP was suspended in 2011 and there were no offerings in
2011.
During the years ended December 31, 2010 and 2009, employees purchased approximately 46,112 and
224,799 shares at average prices of $58.41 and $25.65 per share, respectively. Cash received from purchases
under the ESPP for the years ended December 31, 2010 and 2009 was $2.7 million and $5.8 million,
respectively.
Stock-Based Compensation
Vested stock options granted before June 30, 2004 can be exercised up to three months following
termination of employment. Vested stock options granted after June 30, 2004 and before January 1, 2007 can be
exercised up to one year following termination of employment. Vested stock options granted after January 2007
will remain exercisable for the full ten year contractual term regardless of employment status. The following
table summarizes the assumptions used to value option grants using the lattice-binomial model:
Year Ended December 31,
2011 2010 2009
Dividend yield ................. 0% 0% 0%
Expected volatility ............. 51%–65% 46%–54% 46%–56%
Risk-free interest rate ........... 2.05% – 3.42% 2.65% – 3.67% 2.60% – 3.62%
Suboptimal exercise factor ....... 2.17 – 3.64 1.78 – 3.28 1.73 – 2.01
67