Citrix 2009 Annual Report Download - page 107

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CITRIX SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The assumptions used to value option grants are as follows:
Stock options granted during
2009 2008 2007
Expected volatility factor .................................. 0.34 - 0.44 0.39 - 0.48 0.33 - 0.37
Approximate risk free interest rate ........................... 1.2% - 1.6% 1.7% - 2.8% 3.6% - 4.7%
Expected term (in years) ................................... 3.17 - 3.37 3.35 - 3.56 3.37 - 3.38
Expected dividend yield ................................... 0% 0% 0%
Non-vested Stock
Shares of non-vested stock were assumed in conjunction with the Company’s acquisition of XenSource,
Inc., which upon assumption were reset to vest over three years at a rate of 33.3% of the shares one year from
date of grant and at a rate of 2.78% monthly thereafter based on service. The following table summarizes the
Company’s non-vested stock activity for the year ended December 31, 2009:
Number of
Shares
Weighted-
Average
Fair Value
at Grant Date
Non-vested stock at December 31, 2008 ...................................... 784,780 $39.65
Vested ................................................................ (418,130) 39.65
Forfeited .............................................................. (18,959) 39.65
Non-vested stock at December 31, 2009 ...................................... 347,691 39.65
For the years ended December 31, 2009, 2008 and 2007, the Company recognized stock-based
compensation expense of $16.6 million, $17.2 million and $3.9 million, respectively, related to non-vested stock.
The fair value of non-vested stock released in 2009, 2008 and 2007 was $16.6 million, $11.0 million and $1.3
million, respectively. As of December 31, 2009, there was $13.2 million of total unrecognized compensation cost
related to non-vested stock. That cost is expected to be recognized over a weighted-average period of 0.83 years.
Non-vested Stock Units
Annually, the Company awards vice presidents and senior executives non-vested performance stock units
from the 2005 Plan. The number of non-vested stock units underlying each award is determined one year after
the date of the award and is based on achievement of a specific corporate financial performance goal. If the
performance goal is less than 90% attained, then no non-vested stock units will be issued pursuant to the
authorized award. For performance at and above 90%, the number of non-vested stock units issued is based on a
graduated slope, with the maximum number of non-vested stock units issuable pursuant to the award capped at
125% of the base number of non-vested stock units set forth in the executive’s award agreement. The Company
is required to estimate the attainment that will be achieved related to the defined performance goals and the
number of non-vested stock units that will ultimately be awarded in order to recognize compensation expense
over the vesting period. If the performance goal is met, the non-vested stock units vest 33.33% on each
anniversary subsequent to the date of the award. Each non-vested stock unit, upon vesting, represents the right to
receive one share of the Company’s common stock. If the performance goals are not met, no compensation cost
will ultimately be recognized in that period and any previously recognized compensation cost will be reversed.
During 2009 and 2008, the goal was achieved within the range of the graduated slope, and there was no material
adjustment to compensation costs related to non-vested stock units granted to executives. In addition, the
Company also awards non-vested stock units to certain senior members of management that vest based on
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