Citrix 2006 Annual Report Download - page 94

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stock units set forth in the executive’s award agreement. If
the performance goal is met, the non-vested stock units will
vest 33.33% on each anniversary subsequent to the date
of the award. Each non-vested stock unit, upon vesting, will
represent the right to receive one share of the Company’s
common stock. If the performance goals are not met, no
compensation cost will be recognized and any previously
recognized compensation cost will be reversed. During
the second quarter of 2006, the Company also awarded
non-vested stock units to its non-employee directors. These
units vest monthly in equal installments based on service
and, upon vesting, each stock unit will represent the right to
receive one share of the Company’s common stock.
The following table summarizes the Company’s non-
vested stock unit activity with performance measures as of
December 31, 2006:
Number
of Shares
Weighted-
Average
Fair Value
at Grant
Date
Non-vested at December 31, 2005 — $ —
Granted 323,256 34.41
Vested (67,117) 34.52
Forfeited or expired (15,844) 32.08
Non-vested at December 31, 2006 240,295 34.54
As of December 31, 2006, there was $64.8 million of total
unrecognized compensation cost related to the stock
options, non-vested stock and non-vested stock units. That
cost is expected to be recognized over a weighted-average
period of 1.92 years.
2005 ESPP
The Company estimated the fair value of the stock-based
compensation related to the 2005 ESPP using the Black-
Scholes option pricing model, applying the following
assumptions and amortizing that value to expense over the
vesting period:
2006
Expected volatility factor 0.27 – 0.37
Approximate risk free interest rate 4.5% - 5.1%
Expected term 6 months
Expected dividend yield 0%
The Company estimated the expected volatility factor
based on implied volatility in market traded options with
remaining terms similar to the expected term of the 2005
ESPP options. The approximate risk free interest rate
was based on the implied yield available on U.S. Treasury
zero-coupon issues with remaining term equivalent to the
expected term of the 2005 ESPP options. The expected
term for the 2005 ESPP options is the six month Payment
Period. The weighted average fair value of the shares
purchased under the 2005 ESPP during 2006 was $26.30.
Benefit Plan
The Company maintains a 401(k) benefit plan (the “Plan”)
allowing eligible U.S.-based employees to contribute
up to 60% of their annual compensation, limited to an
annual maximum amount as set periodically by the
Internal Revenue Service. The Company, at its discretion,
may contribute up to $0.50 of each dollar of employee
contribution. The Company’s total matching contribution
to an employee is limited to a maximum of 6% of the
employee’s annual compensation. The Company’s
matching contributions were $3.7 million, $2.8 million and
$2.3 million in 2006, 2005 and 2004, respectively. The
Company’s contributions vest over a four-year period at
25% per year.
8. Capital Stock
Stock Repurchase Programs
The Company’s Board of Directors authorized an ongoing
stock repurchase program with a total repurchase
authority granted to the Company of $1.5 billion, of
which $200 million was authorized in February 2006
and $300 million was authorized in October 2006. The
Company may use the approved dollar authority to
repurchase stock at any time until the approved amounts
are exhausted. The objective of the Company’s stock
repurchase program is to improve stockholders’ returns.
At December 31, 2006, approximately $293.4 million was
available to repurchase common stock pursuant to the
stock repurchase program. All shares repurchased are
recorded as treasury stock.
The Company is authorized to make open market
purchases of its common stock using general corporate
funds. Additionally, during 2006, 2005 and 2004, the
Company entered into structured stock repurchase
arrangements with large financial institutions using general
corporate funds in order to lower the average cost to