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SUPPORTSOFT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 7. Stockholders’ Equity (Continued)
The following table represents stock option activity for the years ended December 31, 2004, 2005, and 2006:
Number of
Shares
Weighted
Average
Exercise Price
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic Value
(in ‘000’s)
Outstanding options at December 31,
2003 8,318,781 $ 6.26
Granted 3,680,132 $ 7.60
Exercised (766,027) $ 3.80
Forfeited (760,197) $ 9.83
Outstanding options at December 31,
2004 10,472,689 $ 6.65 8.04 $ 16,675
Granted 2,209,385 $ 4.90
Exercised (959,016) $ 2.25
Forfeited (1,598,920) $ 8.05
Outstanding options at December 31,
2005 10,124,138 $ 6.46 7.37 $ 3,573
Granted 7,102,965 $ 4.44
Exercised (807,967) $ 4.71
Forfeited (2,838,262) $ 7.64
Outstanding options at December 31,
2006 13,580,874 $ 5.33 6.44 $ 13,048
Options vested and expected to vest 13,459,193 $ 5.34 6.44 $ 12,925
Outstanding exercisable at the end of
the period 6,593,567 $ 6.27 6.44 $ 5,734
The aggregate intrinsic value in the table above represents the total pre−tax intrinsic value that would have been received by the
option holders had they all exercised their options on December 31, 2006, 2005, and 2004. This amount will change based on the fair
market value of the Company’s stock. The total aggregate intrinsic value of options exercised under the Company’s stock options
plans was $1.2 million for the year ended December 31, 2006. The total fair value of options vested is $3.1 million as of December 31,
2006.
At December 31, 2006, there was $14.3 million of unrecognized compensation cost related to existing options outstanding which
is expected to be recognized over a weighted average period of 3.5 years.
Employee Stock Purchase Plan
In February 2000, the Board of Directors approved SupportSoft’s 2000 Employee Stock Purchase Plan (the “2000 Purchase
Plan”). A total of 2,000,000 shares of common stock were initially reserved for issuance under the 2000 Purchase Plan. On January 1
of each year, the number of shares reserved automatically increases by the lesser of 2,000,000 shares, 3% of the outstanding shares, or
an amount determined by the Board of Directors. For 2006, the Board of Directors elected to have zero shares added to the 2000
Purchase Plan. The 2000 Purchase Plan permits eligible employees to acquire shares of SupportSoft’s common stock through periodic
payroll deductions of up to 15% of total compensation. Purchases occur on the last day of each January and July following the end of
each six−month purchase period. The price at which the common stock may be purchased is 85% of the lesser of the fair market
66
Source: SUPPORTSOFT INC, 10−K, March 16, 2007