Clearwire 2007 Annual Report Download - page 99

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The Company also granted stock options to employees of entities under common control who performed
services to the Company to purchase shares of the Company’s Class A common stock. In accordance with EITF
Issue No. 00-23, Issues Related to the Accounting for Stock Compensation Under APB No. 25, Accounting for Stock
Issued to Employees, and FASB Interpretation No. 44, Accounting for Certain Transactions Involving Stock
Compensation, and SFAS No. 123(R), the fair value of such options was recorded as a dividend and a charged
against additional paid-in capital on the line item, deferred share-based compensation. A total of $1.5 million,
$2.4 million, and $34,000 was recorded, as a dividend, for the years ended December 31, 2007, 2006 and 2005,
respectively.
During the year ended December 31, 2007 the Company granted 727,000 options to non-employee consult-
ants, of which 250,000 were forfeited. These options are adjusted to current fair value each quarter during their
vesting periods as services are rendered. During the year ended December 31, 2007, the Company recognized
$345,000 expense and had $2.3 million of unamortized expense as of December 31, 2007 related to these options.
Expense for the year ended December 31, 2006 was $1.3 million.
A summary of option activity from January 1, 2005 through December 31, 2007 is presented below:
Number of
Options
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term
(Years)
Aggregate
Intrinsic
Value As of
12/31/2007
(In millions)
Options outstanding — January 1, 2005 .......... 6,906,406 $ 4.59 9.6
Granted ................................ 1,215,311 10.74
Forfeited ............................... (168,859) 6.18
Options outstanding — December 31, 2005 ....... 7,952,858 5.58 8.7
Granted ................................ 3,942,304 16.95
Forfeited ............................... (568,048) 10.84
Exercised .............................. (56,709) 4.59
Options outstanding — December 31, 2006 ....... 11,270,405 9.30 8.3
Granted ................................ 7,014,662 23.72
SARS converted to options ................. 106,302 17.64
Forfeited ............................... (1,328,100) 20.32
Exercised .............................. (720,315) 6.55
Options outstanding — December 31, 2007 ....... 16,342,954 $14.83 7.8 $55.2
Exercisable outstanding — December 31, 2007..... 6,261,909 $ 6.85 6.4 $46.0
Vested and expected to vest — December 31, 2007. . 14,656,393 $14.15 7.6 $54.5
The intrinsic value of options exercised during the year ended December 31, 2007, was $11.0 million as
compared to $760,000 during the year ended December 31, 2006. The intrinsic value is calculated as the difference
between the estimated fair value of the Company’s common stock at December 31, 2007 or on the date of exercise
and the exercise price of the stock options on the date of grant.
91
CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)