Western Digital 2006 Annual Report Download - page 72

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The following tables summarize information about options outstanding and exercisable under the Stock Plans at
June 30, 2006 (in millions, except per share amounts):
Range of
Exercise Prices
Number
of Shares
Remaining
Contractual Life*
(in years)
Weighted Average
Exercise Price
Number
of Shares
Weighted Average
Exercise Price
Options Outstanding Options Exercisable
$ 2.10 – 3.50 1.2 4.43 $ 2.47 1.2 $ 2.47
3.64 – 4.40 1.3 5.96 3.91 1.2 3.92
4.44 – 6.58 1.4 4.41 5.59 1.3 5.60
6.64 – 8.58 0.7 5.32 7.88 0.5 7.95
8.63 – 8.89 1.8 8.22 8.88 0.5 8.86
8.99 – 11.96 1.4 7.10 10.50 0.6 10.70
11.98 – 12.84 1.4 7.42 12.64 0.6 12.74
12.88 – 13.76 1.5 6.41 13.40 0.5 13.03
13.95 – 31.88 1.2 6.21 20.51 0.5 22.04
32.69 – 48.50 0.5 1.02 34.29 0.5 34.29
12.4 6.10 $10.65 7.4 $ 9.67
* Represents the weighted average remaining contractual lives of the options outstanding.
Deferred Stock Compensation
The Company granted approximately 2.0 million, 1.6 million and 0.1 million shares of restricted stock during
2006, 2005 and 2004, respectively. Of the restricted stock granted in fiscal 2006, 1.7 million represents outstanding
restricted stock units and 0.3 million represents restricted stock awards (which are not deemed to be outstanding until
vesting occurs). The restricted stock vests annually over periods from two to four years. The aggregate market value of the
restricted stock at the date of issuance was $26.5 million, $17.1 million and $1.3 million in 2006, 2005 and 2004,
respectively. These amounts have been recorded as deferred compensation, a separate component of shareholders’ equity,
and are being amortized to operating expense over the corresponding vesting periods. For purposes of valuing these
awards, the Company has assumed a forfeiture rate of zero based on an historical analysis indicating minimal forfeitures
for these types of awards. For the year ended June 30, 2006, the Company charged to expense $15.9 million related to
restricted stock awards that were vested during the period. Of this amount, $7.2 million represented the incremental cost
from the modification of pre-existing awards. As of June 30, 2006, the aggregate unamortized fair value of all unvested
restricted stock awards was $26.4 million, which will be amortized on a straight-line basis over a weighted average
vesting period of approximately 1.5 years.
During 2005, the Company also awarded certain executives and other key employees 0.5 million restricted stock
units with performance-based vesting (“Performance Shares”). However, during 2006, the Company cancelled all
outstanding Performance Shares. The impact of these awards, and subsequent cancellation, were not material to the
consolidated financial statements.
66
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)