Aarons 2006 Annual Report Download - page 37

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35
million in 2006, 2005, and 2004, respectively. The total fair
value of options vested was $4.9 million, $1.2 million, and
$675,000 in 2006, 2005, and 2004, respectively. The
Company did not grant any stock options in 2006.
The Company amended the Key Executive grants in 2006 and
raised the exercise price of each of the stock options to the fair
market value of the common stock on the original grant date,
adjusted for a 3-for-2 stock dividend that occurred on August 2,
2004 in the case of those stock options with an original grant
date that preceded the stock dividend date. The amendment
also provides that, in order to compensate the grantees for
the increase in the exercise price of the stock options, the
full original discounted amount will be paid in cash on the
applicable 2007 vesting date.
Shares of restricted stock may be granted to employees and
directors and typically vest over approximately three years.
Restricted stock grants may be subject to one or more objective
employment, performance or other forfeiture conditions as
established at the time of grant. Any shares of restricted stock
that are forfeited will again become available for issuance.
Compensation cost for restricted stock is equal to the fair
market value of the shares at the date of the award and is
amortized to compensation expense over the vesting period.
Total compensation expense related to restricted stock was
$277,000 in 2006.
The following table summarizes information about restricted
stock activity:
Restricted Weighted Average
(In Thousands) Stock Grant Price
Outstanding at January 1, 2006 — —
Granted 244 25.40
Vested — —
Forfeited (2) 25.40
Outstanding at December 31, 2006 242 25.40
Options Outstanding Options Exercisable
Weighted Average
Range of Number Outstanding Remaining Contractual Weighted Average Number Exercisable Weighted Average
Exercise Prices December 31, 2006 Life (in years) Exercise price December 31, 2006 Exercise Price
$ 4.38 – 10.00 1,039,511 3.63 $ 6.93 1,039,511 $ 6.93
10.01 – 15.00 376,750 6.72 14.37 376,750 14.37
15.01 – 20.00 203,250 7.11 17.37 83,250 15.35
20.01 – 24.94 704,396 7.80 22.24 2,000 21.84
$ 4.38 – 24.9 2,323,907 5.70 $13.69 1,501,511 $ 9.28
The table below summarizes option activity for the periods
indicated in the Company’s stock option plans:
Weighted Average Aggregate Weighted
Options Weighted Remaining Intrinsic Value Average
(In Thousands) Average Contractual Term (In Thousands) Fair Value
Outstanding at January 1, 2006 3,026 $11.73 $46,726 $4.01
Granted — — — —
Exercised (660) 6.76 (12,743) 2.22
Forfeited (42) 19.32 (809) 8.19
Outstanding at December 31, 2006 2,324 13.69 5.70 years 31,811 6.58
Exercisable at December 31, 2006 1,502 $ 9.28 4.57 years $13,936 $4.89
The following table summarizes information about stock
options outstanding at December 31, 2006:
The weighted average fair value of unvested options was
$7.83 as of January 1, 2006 and $9.65 as of December 31, 2006.
The weighted average fair value of options that vested during
2006 was $7.23.