Clearwire 2007 Annual Report Download - page 100

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Information regarding stock options outstanding and exercisable as of December 31, 2007 is as follows:
Exercise Prices
Number of
Options
Weighted
Average
Contractual
Life
Remaining
(Years)
Weighted
Average
Exercise
Price
Number of
Options
Weighted
Average
Exercise
Price
Options ExercisableOptions Outstanding
$2.25 ............................ 312,498 5.9 $ 2.25 312,498 $ 2.25
$3.00 ............................ 1,865,112 4.9 3.00 1,760,359 3.00
$6.00 ............................ 4,019,909 6.8 6.00 3,006,050 6.00
$12.00 – $15.00........................ 1,726,315 7.5 14.28 609,430 14.02
$16.02 ........................... 311,000 9.9 16.02 — —
$18.00 ........................... 2,237,341 8.4 18.00 568,616 18.00
$20.16 ........................... 122,000 9.8 20.16 — —
$23.30 ........................... 2,093,300 9.4 23.30 — —
$23.52 ........................... 808,164 9.3 24.24 4,956 24.00
$25.00 – $25.33........................ 2,847,315 8.8 25.00 — —
Total ........................ 16,342,954 7.8 $14.83 6,261,909 $ 6.85
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing
model using the following assumptions for the years ended December 31, 2007, 2006 and 2005:
2007 2006 2005
Employee Non-Employee
Expected volatility.................. 57.07% - 64.68% 66.15% - 78.62% 80.31%
Expected dividend yield ............. — — —
Expected life (in years) .............. 6.25 6.25 10
Risk-free interest rate ............... 4.26% - 5.00% 4.45% - 4.92% 4.20% - 4.23%
Weighted average fair value per option at
grant date ...................... $14.59 $11.53 $15.36
During the third and fourth quarters of 2007, an estimate of 7.5% was used for the annual forfeiture rate based
on the Company’s historical experience since inception. Prior to third quarter 2007, the estimated annual forfeiture
rate was 6.4%. During the year ended 2006, an estimate of 3% was used for the annual forfeiture rate.
Expense recorded related to stock options in the year ended December 31, 2007 was $40.1 million compared to
$11.8 million for the year ended December 31, 2006. The total unrecognized share-based compensation costs
related to non-vested stock options outstanding at December 31, 2007 was $77.8 million and is expected to be
recognized over a weighted average period of approximately 2 years.
Restricted Stock Awards
In the year ended December 31, 2007 and 2006, the Company issued 33,333 shares and 83,333 shares of
restricted stock, respectively, with a weighted average grant date fair value of $25.00 and $15.00, respectively, to
certain senior officers which vest in equal annual installments over a two-year period. The Company also agreed to
reimburse the officers for the personal income tax liability associated with the restricted stock. Compensation
expense related to these restricted stock grants was $750,000, $1.0 million and $1.0 million for the years ended
December 31, 2007, 2006 and 2005, respectively.
92
CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)