Sprint - Nextel 2008 Annual Report Download - page 144

CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
A summary of the RSU activity for the years ended December 31, 2009 and 2008 is presented below:
Number of
RSU’s
Weighted-
Average
Grant Price
Restricted stock units outstanding — January 1, 2007 ................. —
Restricted stock units outstanding — December 31, 2007 .............. —
Restricted stock units acquired in purchase accounting — November 28,
2008 ...................................................... 3,216,500 $13.19
Granted ................................................... 716,000 4.10
Forfeited .................................................. (43,000) —
Released .................................................. (508,098) 5.18
Cancelled .................................................. (108,777) —
Restricted stock units outstanding — December 31, 2008 .............. 3,272,625 $13.19
Granted ................................................... 10,938,677 4.39
Forfeited .................................................. (1,217,857) 5.17
Released .................................................. (1,140,251) 6.95
Cancelled .................................................. — —
Restricted stock units outstanding — December 31, 2009 .............. 11,853,194 $ 4.60
The total fair value of grants during 2009 and 2008 was $48.0 million and $2.9 million, respectively. The
intrinsic value of RSUs released during the years ended December 31, 2009 and 2008 was $7.9 million and
$3.2 million, respectively. As of December 31, 2009, there were 11,853,194 units outstanding and total
unrecognized compensation cost of approximately $30.9 million, which is expected to be recognized over a
weighted-average period of approximately 1.8 years.
For the years ended December 31, 2009 and 2008, we used a forfeiture rate of 7.75% and 7.50%,
respectively, in determining compensation expense for our RSUs.
Sprint Equity Compensation Plans
In connection with the Transactions, certain of the Sprint WiMAX Business employees became employees of
Clearwire and currently hold unvested Sprint stock options and RSUs in Sprint’s equity compensation plans, which
we refer to collectively as the Sprint Plans. The underlying share for awards issued under the Sprint Plans is Sprint
common stock. The Sprint Plans allow for continued plan participation as long as the employee remains employed
by a Sprint subsidiary or affiliate. Under the Sprint Plans, options are generally granted with an exercise price equal
to the market value of the underlying shares on the grant date, generally vest over a period of up to four years and
have a contractual term of ten years. RSUs generally have both performance and service requirements with vesting
periods ranging from one to three years. RSUs granted after the second quarter 2008 included quarterly performance
targets but were not granted until performance targets were met. Therefore, at the grant date these awards only had a
remaining service requirement and vesting period of six months following the last day of the applicable quarter.
Employees who were granted RSUs were not required to pay for the shares but generally must remain employed
with Sprint or a subsidiary, until the restrictions lapse, which was typically three years or less. At December 31,
2009, there were 722,954 unvested options and 213,127 unvested RSUs outstanding.
The share-based compensation associated with these employees is incurred by Sprint on our behalf. Sprint
provided us with the fair value of the options and RSUs for each reporting period, which must be remeasured
based on the fair value of the equity instruments at each reporting period until the instruments are vested. Total
unrecognized share-based compensation costs related to unvested stock options and RSUs outstanding as of
December 31, 2009 was $70,250 and $186,100, respectively, and is expected to be recognized over
approximately one year.
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