Netgear 2013 Annual Report Download - page 102

Table of Contents NETGEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Performance awards may be in the form of performance shares or performance units. A performance share means an award denominated in shares
of Company common stock and a performance unit means an award denominated in units having a dollar value or other currency, as determined by the
plan administrator. The plan administrator will determine the number of performance awards that will be granted and will establish the performance
goals and other conditions for payment of such performance awards. The period of measuring the achievement of performance goals will be a minimum
of twelve (12) months.
Other stock-based awards may be granted under the 2006 Plan subject to the terms specified by the plan administrator. Other stock-
based awards
may include dividend equivalents, restricted stock awards, or amounts which are equivalent to all or a portion of any federal, state, local, domestic or
foreign taxes relating to an award, and may be payable in shares, cash, other securities or any other form of property as the plan administrator may
determine.
In the event of a change in control of the Company, all awards under the 2006 Plan vest in full and all outstanding performance shares and
performance units will be paid out upon transfer.
Any shares of common stock subject to an award that is forfeited, settled in cash, expires or is otherwise settled without the issuance of shares shall
again be available for awards under the 2006 Plan. Additionally, any shares that are tendered by a participant of the 2006 Plan or retained by the
Company as full or partial payment to the Company for the purchase of an award or to satisfy tax withholding obligations in connection with an award
shall no longer again be made available for issuance under the 2006 Plan.
Employee Stock Purchase Plan
The Company sponsors an Employee Stock Purchase Plan (the “ESPP”), pursuant to which eligible employees may contribute up to 10%
of
compensation, subject to certain income limits, to purchase shares of the Company’s common stock. Employees may purchase stock semi-
annually at a
price equal to 85%
of the fair market value on the purchase date. Since the price of the shares is determined at the purchase date, the Company
recognizes expense based on the 15% discount at purchase. For the years ended December 31, 2013 , 2012 , and 2011
, ESPP compensation expense was
$420,000 , $371,000 and $354,000 , respectively. As of December 31, 2013 , 307,500 shares were reserved for future grants under the ESPP.
Option Activity
Stock options activity under the stock option plans during the year ended December 31, 2013 was as follows:
The aggregate intrinsic values in the table above represent the total pre-tax intrinsic values (the difference between the Company’
s closing stock
price on the last trading day of 2013 and the exercise price, multiplied by the number of shares underlying the in-the-
money options) that would have
been received by the option holders had all option holders exercised their options on
99
Outstanding Options
Number of
Shares
Weighted Average
Exercise Price Per
Share
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value
(In thousands) (In dollars) (In years) (In thousands)
December 31, 2012
4,324
$
29.29
Granted
503
33.45
Exercised
(352
)
21.28
Cancelled
(249
)
34.27
Expired
(61
)
33.78
December 31, 2013
4,165
$
30.11
6.5
$
16,376
As of December 31, 2013:
Vested and expected to vest
4,008
$
29.98
6.4
$
16,282
Exercisable Options
2,695
$
28.29
5.5
$
15,245