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Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
As of December 31, 2010, for the VMware stock options, the weighted-average remaining contractual term was 3.2 years and the aggregate intrinsic
value was $642.5 million for the 10.7 million exercisable shares. For the 25.6 million shares vested and expected to vest at December 31, 2010, the weighted-
average remaining contractual term was 3.8 years and the aggregate intrinsic value was $1,438.3 million. These aggregate intrinsic values represent the total
pre-tax intrinsic values based on VMware's closing stock price of $88.91 as of December 31, 2010, which would have been received by the option holders had
all in-the-money options been exercised as of that date.
Cash proceeds from the exercise of VMware stock options for the years ended December 31, 2010, 2009 and 2008 were $386.1 million, $209.4 million
and $143.2 million, respectively. The options exercised in 2010, 2009 and 2008 had a pre-tax intrinsic value of $678.8 million, $132.6 million and $219.6
million, respectively, and income tax benefits realized from the exercise of stock options of $171.2 million, $47.1 million and $71.4 million, respectively.
VMware Restricted Stock
VMware restricted stock primarily consists of restricted stock units granted to employees and also includes restricted stock awards and other restricted
stock. Other restricted stock includes shares issued in 2009 to certain employees of SpringSource who agreed to accept shares of VMware Class A common
stock subject to vesting restrictions in lieu of a portion of their cash merger proceeds. In addition, other restricted stock includes options exercised prior to
vesting by VMware's non-employee directors. The exercise of those options prior to vesting resulted in the outstanding shares being subject to repurchase and
hence restricted until such time as the respective options vest. These options completed vesting in 2010.
The following table summarizes restricted stock activity since January 1, 2008 for VMware restricted stock (shares in thousands):
Number of
Shares
Weighted Average
Grant Date
Fair Value
Restricted stock at January 1, 2008 3,565 $ 24.64
Granted 6,619 35.14
Vested (2,153) 22.58
Forfeited (405) 61.90
Outstanding, December 31, 2008 7,626 32.35
Granted 5,200 33.63
Vested (2,881) 31.31
Forfeited (734) 34.81
Outstanding, December 31, 2009 9,211 33.21
Granted 4,933 74.87
Vested (3,688) 32.38
Forfeited (704) 39.05
Outstanding, December 31, 2010 9,752 $ 54.17
The total fair value of VMware restricted stock-based awards that vested in the years ended December 31, 2010, 2009 and 2008 was $258.0 million,
$88.8 million and $116.3 million, respectively. As of December 31, 2010, restricted stock unit awards and other restricted stock representing 9.8 million
shares of VMware were outstanding, with an aggregate intrinsic value of $867.1 million based on the closing share price as of December 31, 2010. These
shares are scheduled to vest through 2014.
The VMware restricted stock unit awards are valued based on the VMware stock price on the date of grant. Shares underlying restricted stock unit
awards are not issued until the restricted stock units vest. The majority of VMware's restricted stock unit awards have pro rata vesting over three or four years.
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