Sprint - Nextel 2008 Annual Report Download - page 142

CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
14. Share-Based Payments
In connection with the Closing, we assumed the Old Clearwire 2008 Stock Compensation Plan, which we
refer to as the 2008 Plan, the Old Clearwire 2007 Stock Compensation Plan, which we refer to as the 2007 Plan,
and the Old Clearwire 2003 Stock Option Plan, which we refer to as the 2003 Plan. Share grants generally vest
ratably over four years and expire no later than ten years after the date of grant. Grants to be awarded under the
2008 Plan will be made available at the discretion of the Compensation Committee of the Board of Directors
from authorized but unissued shares, authorized and issued shares reacquired and held as treasury shares, or a
combination thereof. At December 31, 2009, there were 62,229,805 shares available for grant under the 2008
Plan, which authorizes us to grant incentive stock options, non-qualified stock options, stock appreciation rights,
restricted stock, restricted stock units, and other stock awards to our employees, directors and consultants. With
the adoption of the 2008 Plan, no additional stock options will be granted under the 2007 Plan or the 2003 Plan.
Share-based compensation expense is based on the estimated grant-date fair value of the award and is
recognized net of estimated forfeitures on those shares expected to vest over a graded vesting schedule on a
straight-line basis over the requisite service period for each separately vesting portion of the award as if the
award was, in-substance, multiple awards.
Stock Options
In connection with the Transactions, all Old Clearwire stock options issued and outstanding at the Closing
were exchanged on a one-for-one basis for stock options with equivalent terms. Following the Closing, we
granted options to certain officers and employees under the 2008 Plan. All options vest over a four-year period.
The fair value of option grants was estimated on the date of grant using the Black-Scholes option pricing model.
A summary of option activity from January 1, 2007 through December 31, 2009 is presented below:
Number of
Options
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term
(Years)
Aggregate
Intrinsic
Value As of
12/31/2009
(In millions)
Options outstanding — January 1, 2007 ...... —
Options outstanding — December 31, 2007 . . . —
Options acquired in purchase accounting —
November 28, 2008 .................... 19,093,614 $14.38
Granted ................................ 425,000 4.10
Forfeited ............................... (337,147) 11.64
Exercised .............................. (9,866) 3.00
Options outstanding — December 31, 2008 . . . 19,171,601 $14.21 6.36
Granted .............................. 7,075,000 4.30
Forfeited ............................. (4,084,112) 15.13
Exercised ............................ (624,758) 3.51
Options outstanding — December 31, 2009 . . . 21,537,731 $11.09 6.39 $25.51
Vested and expected to vest — December 31,
2009 ................................ 19,715,140 $11.45 6.23 $22.17
Exercisable outstanding — December 31,
2009 ................................ 12,066,459 $13.54 5.21 $ 8.42
F-76