Citrix 2006 Annual Report Download - page 70

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
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the Compensation Committee typically approved such
grants at a meeting or by unanimous written consent form.
During this period, the Compensation Committee approved
2.6 million options on 19 grant dates. The Company
determined that for seven of these grant dates, the original
grant date differed from the appropriate measurement
date for financial accounting purposes. The Company
recorded approximately $32,000 in pre-tax stock-based
compensation expense related to these grants. The last
grant for which the Company revised the measurement
date was March 1, 2005.
Board Grants. From 1996 through 2006, the Company
made 48 grants to non-employee directors on 21 grant
dates for a total of 3.1 million options. The Company revised
the measurement dates for certain of these grants because
they were awarded on dates other than the automatic
dates prescribed in the applicable stockholder plan and
in amounts that differed nominally from the formulas set
forth in the plan. The Company recognized approximately
$0.5 million in pre-tax stock-based compensation expense
related to the following grants:
• The Company awarded to non-employee
directors an aggregate of 0.7 million options on
five grant dates between 1998 and 2002. Instead
of awarding these options on the anniversary
date of the directors’ appointment to the Board,
they were awarded on the first day of the month
containing the directors’ anniversary date, in
error. These options were issued between three
and 21 days in advance of the actual anniversary
date. The Company determined that the grants
were not fixed with finality until the anniversary
date prescribed by the plan because that date
represents the date on which approval existed
pursuant to the stockholder approved plan.
The Company revised the measurement dates
accordingly, and recognized pre-tax compensation
expense of $0.5 million representing the difference
in intrinsic value between grant date prescribed by
the plan and the original grant date.
• The Company awarded approximately 0.1 million
options in June 2002 to non-employee directors.
The grant was one day later than the automatic date
prescribed by the stockholder approved plan and the
number of options were nominally different from the
plan formula (aggregate difference of 770 options).
Based on the available evidence, the Company
concluded that the grant date error constituted
a modification of the automatic grant that should
have occurred on the previous day. The Company
concluded that the grant was fixed with finality on
the date awarded and the dating error and share
differences resulted in compensation expense of
approximately $5,000, representing the difference in
the intrinsic value between the automatic grant date
prescribed by the plan and the original grant date.
• In 2000, the Company awarded an anniversary grant
for approximately 0.2 million options in error one year
after the actual anniversary date of the director. The
Company considered the grant a modification of the
prescribed automatic grant under the stockholder
approved plan and concluded that the grant was
fixed with finality on the grant date. However, no
compensation expense resulted as the closing price
of the Company’s common stock increased from the
automatic grant date to the grant date of the award.
Other Measurement Date Judgments
The Company identified other circumstances related to
approximately 4.2 million options (approximately 3.8%
of options issued) that resulted in revised measurement
dates. In some instances, the Company made changes
after the grant date to add individuals to the list of grant
recipients and received later approval by the Compensation
Committee. In other instances, the Company issued
options that were different in amount than that approved
by the Compensation Committee or issued options for
which the Company was unable to locate the approval
documentation during the investigation. In each of these
circumstances, the Company evaluated the existing
information related to each individual grant and it
established a new measurement date when it determined
that the terms of the award were fixed with finality.