Philips 2006 Annual Report Download - page 164

Philips Annual Report 2006164
The aggregate intrinsic value in the tables above represents the total pretax intrinsic value (the difference between
the Company’s closing stock price on the last trading day of 2006 and the exercise price, multiplied by the number
of in-the-money options) that would have been received by the option holders if the options had been exercised on
December 31, 2006. At December 31, 2006, there was a total of EUR 70 million of unrecognized compensation cost
related to non-vested stock options. This cost is expected to be recognized over a weighted-average period of 2.1
years. Cash received from option exercises under the Company’s fi xed and variable option plans amounted to EUR
120 million, EUR 22 million, and EUR 39 million in 2006, 2005, and 2004, respectively. The actual tax deductions
realized as a result of stock option exercises totaled EUR 16 million, EUR 1 million, and EUR 7 million, in 2006, 2005,
and 2004, respectively.
A summary of the status of the Company’s restricted share rights plan as of December 31, 2006 and changes during
the year is presented below:
Restricted share rights
1)
EUR-denominated
shares
weighted average
grant-date fair value
Outstanding at January 1, 2006 2,411,315 19.67
Granted 1,381,113 25.38
Vested/Issued 1,679,153 20.55
Forfeited 92,345 20.95
Outstanding at December 31, 2006 2,020,930 22.84
1) Excludes incremental shares that may be received if shares awarded under the restricted share rights plan are not sold
for a three-year period.
Restricted share rights
1)
USD-denominated
shares
weighted average
grant-date fair value
Outstanding at January 1, 2006 1,825,476 24.30
Granted 1,085,076 30.90
Vested/Issued 1,247,268 24.91
Forfeited 155,403 26.25
Outstanding at December 31, 2006 1,507,881 28.43
1) Excludes incremental shares that may be received if shares awarded under the restricted share rights plan are not sold
for a three-year period.
At December 31, 2006, there was a total of EUR 62 million of unrecognized compensation cost related to non-vested
restricted share rights. This cost is expected to be recognized over a weighted-average period of 1.9 years.
In November 2005, the Company acquired a controlling interest in Lumileds (refer to note 2). Lumileds had an existing
stock option plan that provided for the granting of options to purchase depository receipts, representing benefi cial
economic and voting interests in a like number of shares to its employees and certain consultants. Options under
the plan were granted for periods up to 10 years at prices no less than 85% of the estimated fair value of the shares
on the date of grant. Options granted generally vest over 4 years at a rate of 12.5% on the date 6 months from the
grant date and then monthly thereafter.
The plan also included a fair value put and call feature, whereby employees can require Lumileds to purchase depository
receipts obtained via the exercise of options, or Lumileds may elect to purchase such depository receipts at fair value
at the time of purchase.
112 Group fi nancial statements
Notes to the group fi nancial statements
172 IFRS information 218 Company fi nancial statements