Netgear 2006 Annual Report Download - page 68

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Table of Contents
NETGEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Activity under the Company’s Stock Option Plans is set forth as follows:
Options outstanding under the stock option plans as of December 31, 2005 and changes during the year ended
December 31, 2006 were as follows:
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the
Company’s closing stock price on the last trading day of fiscal 2006 and the exercise price, multiplied by the number of
shares underlying the in-the-money options) that would have been received by the option holders had all option holders
exercised their options on December 31, 2006. This amount changes based on the fair market value of the Company’s stock.
Total intrinsic value of options exercised for the year ended December 31, 2004, 2005 and 2006 was $30.9 million,
$18.7 million, and $15.1 million, respectively. Total fair value of options expensed for the year ended December 31, 2006
was $3.2 million, net of tax.
The total fair value of options vested during the years ended December 31, 2004, 2005, and 2006 was $1.9 million,
$1.1 million, and $2.8 million, respectively.
64
December 31, 2004
December 31, 2005
Weighted
Weighted
Average
Average
Exercise
Exercise
Shares
Price
Shares
Price
Options outstanding at beginning of year
6,561,693
$
5.39
4,147,089
$
7.00
Options granted
614,602
13.60
1,147,050
17.22
Options exercised
(2,796,428
)
4.64
(1,378,373
)
5.77
Options cancelled
(232,778
)
7.41
(242,079
)
9.41
Outstanding at end of year
4,147,089
7.00
3,673,687
10.49
Options exercisable at end of year
2,644,063
5.29
2,959,255
9.82
Weighted
Weighted
Average
Average
Remaining
Aggregate
Exercise
Contractual
Intrinsic
Shares
Price
Term (In Years)
Value
(In thousands)
Options outstanding at December 31, 2005
3,673,687
$
10.49
Options granted
1,326,490
22.06
Options exercised
(932,928
)
7.97
Options cancelled
(132,792
)
16.60
Options outstanding at December 31, 2006
3,934,457
$
14.79
7.13
$
45,148
Options exercisable and expected to vest at December 31,
2006
3,843,643
$
14.64
7.08
$
44,650
Options exercisable at December 31, 2006
2,386,728
$
10.86
5.72
$
36,732