SanDisk 2006 Annual Report Download - page 120

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A summary of option and SARs activity under all of the Company’s share-based compensation plans as of
December 31, 2006 and changes during the year ended December 31, 2006 is presented below:
Shares
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term (Years)
Aggregate
Intrinsic
Value
(In thousands, except exercise
price and contractual term)
Options outstanding at January 1, 2006 .......... 20,316 $21.57
Granted................................ 6,021 58.41
Exercised............................... (4,861) 17.91
Forfeited............................... (851) 41.05
Expired................................ (40) 40.29
Options and SARs assumed through acquisition . . 5,807 30.57
Options and SARs outstanding at December 31,
2006 .................................. 26,392 31.97 6.7 $392,469
Options and SARs vested and expected to vest after
December 31, 2006 ....................... 24,890 31.14 6.6 $385,791
Options and SARs exercisable at December 31,
2006 .................................. 11,343 $18.19 5.8 $284,804
During the year ended December 31, 2006, the aggregate intrinsic value of options and SARs exercised under
the Company’s share-based compensation plans was $205.6 million. At December 31, 2006, the total compensation
cost related to options and SARs granted to employees under the Company’s share-based compensation plans but
not yet recognized was approximately $231.8 million, net of estimated forfeitures. This cost will be amortized on a
straight-line basis over a weighted average period of approximately 2.6 years. Options and SARs valuation
assumptions related to Matrix and msystems acquisitions are discussed in Note 10, “Business Acquisitions.”
Restricted Stock. Restricted stock and restricted stock units are converted into shares of the Company’s
common stock upon vesting on a one-for-one basis. Typically, vesting of restricted stock is subject to the employee’s
continuing service to the Company. The cost of these awards is determined using the fair value of the Company’s
common stock on the date of the grant, and compensation is recognized on a straight-line basis over the requisite
vesting period.
A summary of the changes in restricted stock units outstanding under the Company’s share-based compen-
sation plan during the fiscal year ended December 31, 2006 is presented below:
Shares
Weighted
Average Grant
Date Fair Value
Aggregate
Intrinsic
Value
Non-vested share units at January 1, 2006 ............ 105,188 $42.19
Granted.................................... 515,794 57.69
Vested..................................... (97,220) 52.21
Forfeited................................... (64,911) 63.85
Restricted stock units assumed through acquisition .... 139,338 72.83
Non-vested share units at December 31, 2006 ......... 598,189 $58.71 $25,740,073
As of December 31, 2006, the Company had $28.3 million of total unrecognized compensation expense, net of
estimated forfeitures, related to restricted stock, which will be recognized over a weighted average estimated
Annual Report
F-21
Notes to Consolidated Financial Statements — (Continued)