Costco 2006 Annual Report Download - page 63

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The following is a summary of stock options outstanding as of September 3, 2006 (number of options
in thousands):
Options Outstanding Options Exercisable
Range of Prices Number
Weighted
Average
Remaining
Contractual
Life
Weighted
Average
Exercise
Price Number
Weighted-
Average
Exercise
Price
$9.00–$27.13 ....... 2,669 1.26 $20.46 2,669 $20.46
$30.41–$30.41 ...... 5,133 6.58 30.41 2,249 30.41
$31.55–$34.28 ...... 4,321 4.86 33.92 3,815 34.08
$36.00–$36.91 ...... 2,990 2.74 36.78 2,990 36.78
$37.35–$37.35 ...... 5,902 7.58 37.35 1,840 37.35
$37.44–$39.65 ...... 4,321 5.67 38.81 3,033 38.85
$43.00–$43.00 ...... 3,132 3.52 43.00 3,132 43.00
$43.79–$43.79 ...... 8,530 8.58 43.79 1,483 43.79
$44.97–$46.46 ...... 2,498 7.33 45.93 706 45.28
$52.50–$52.50 ...... 372 3.58 52.50 372 52.50
39,868 6.00 $37.57 22,289 $35.92
At August 28, 2005 and August 29, 2004, there were 25,987 and 27,513 options exercisable at
weighted average exercise prices of $33.66 and $31.84, respectively.
Summary of Restricted Stock Unit Activity
In the fourth quarter of fiscal 2006, the Company ceased the granting of stock options in favor of RSUs.
Generally, RSUs vest over five years; however, the Company also provides for accelerated vesting
upon retirement for recipients that have attained certain years of service with the Company. Recipients
are not entitled to vote or receive dividends on unvested shares. Accordingly, the fair value of RSUs is
the quoted market value of the Company’s common stock on the date of grant less the present value of
the expected dividends forgone during the vesting period. At September 3, 2006, 10.6 million RSUs
were available to be granted to eligible employees, directors and consultants under the Second
Restated 2002 Plan.
The following table summarizes information about outstanding RSUs:
Number of
Units
(in 000’s)
Weighted-
Average
Grant Date
Fair Value
Non-vested at August 28, 2005 ................... — $ —
Granted ...................................... 1,408 52.31
Vested ....................................... — —
Forfeited ..................................... — —
Non-vested at September 3, 2006 ................. 1,408 $52.31
The Company recorded stock-based compensation expense related to RSUs of $4,924 in fiscal 2006.
The related total tax benefit was $1,623 in fiscal 2006. The remaining unrecognized compensation cost
related to non-vested restricted stock units at September 3, 2006, was $67,000 and the weighted-
average period of time over which this cost will be recognized is 4.8 years.
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