Redbox 2007 Annual Report Download - page 60

Download and view the complete annual report

Please find page 60 of the 2007 Redbox annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 72

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72

Stock options: Stock options are granted to employees under the 2000 Amended and Restated Equity
Incentive Plan (the “2000 Plan”) and the 1997 Amended and Restated Equity Incentive Plan (the “1997 Plan”).
Options awarded vest annually over 4 years and expire after 5 years. Shares of common stock are issued upon
exercise of stock options. In 2005, we revised, on a prospective basis, the contractual term of the stock option
awards from ten years to five years. We have reserved a total of 770,000 shares of common stock for issuance under
the 2000 Plan and 8,117,274 shares of common stock for issuance under the 1997 Plan. Stock options have been
granted to officers and employees to purchase common stock at prices ranging from $0.70 to $34.45 per share,
which represented the fair market value at the date of grants and our best estimate of fair market value for grants
issued prior to our initial public offering.
Under the terms of our Amended and Restated 1997 Non-Employee Directors’ Stock Option Plan, the board of
directors has provided for the automatic grant of options to purchase shares of common stock to non-employee
directors. We have reserved a total of 400,000 shares of common stock for issuance under the Non-Employee
Directors’ Stock Option Plan. Stock options have been granted to non-employee directors to purchase our common
stock at prices of $7.38 to $31.95 per share, which represented the fair market value at the date of grant.
The price ranges of all options exercised were $8.00 to $30.07 in 2007, $0.70 to $31.49 in 2006 and $0.70 to
$23.30 in 2005. As of December 31, 2007, there were 5,283,236 shares of unissued common stock reserved for
issuance under all the Stock Plans of which 2,614,724 shares were available for future grants.
The following table presents a summary of the stock option activity for the years ended December 31:
Shares
Weighted
average
exercise price Shares
Weighted
average
exercise price Shares
Weighted
average
exercise price
2007 2006 2005
OUTSTANDING,
Beginning of year . . . . . 2,514,435 $21.52 2,656,697 $20.81 2,442,995 $19.23
Granted ............ 502,924 30.09 232,646 24.83 846,600 23.35
Exercised ........... (224,229) 19.88 (310,500) 17.78 (324,082) 14.09
Cancelled, expired or
forfeited .......... (124,618) 26.05 (64,408) 22.04 (308,816) 22.36
OUTSTANDING, End of
year . . ............. 2,668,512 23.07 2,514,435 21.52 2,656,697 20.81
EXERCISABLE, End of
year . . ............. 1,825,286 21.29 1,652,468 20.87 1,437,546 19.77
As of December 31, 2007, total unrecognized stock-based compensation expense related to unvested stock
options was approximately $6.4 million. This expense is expected to be recognized over a weighted average period
of approximately 15 months. As of December 31, 2007, the weighted average remaining contractual term for
options outstanding and options exercisable was 4.44 years and 4.64 years, respectively. As of December 31, 2007,
the aggregate intrinsic value for options outstanding and options exercisable was $13.6 million and $12.5 million,
respectively. During the year ended December 31, 2007, the total intrinsic value of stock options exercised was
approximately $2.4 million.
58