Page 110 - New8814 GP 2011_AR-fnl

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For stock options granted during the periods indicated below, the fair value of options granted was estimated on the date
of grant using the Black-Scholes option-pricing model, a pricing model acceptable under GAAP, with the following
weighted-average assumptions:
Year Ended
December 31,
2011
Year Ended
December 31,
2010
Year Ended
December 31,
2009
Expected life
*
6.0
6.2
Interest rate
*
2.32%
2.85%
Volatility
*
63.13%
67.80%
Dividend yield
*
-
-
* The Company did not grant any stock opt ion awards during the year ended December 31, 2011.
The expected life of options granted represents the period of time in years that options granted are expected to be
outstanding. The Company uses a simplified method to estimate the expected life of options due to lack of historical
experience. The interest rate represents the annual interest rate a risk-free investment could potentially earn during the
expected life of the option grant. Expected volatility is based on weighted-average historical volatility of the Company’s
common stock and a peer group.
All of the Company’s existing share-based compensation awards have been determined to be equity awards. The
Company recognizes compensation costs for stock option awards which vest with the passage of time with only service
conditions on a straight-line basis over the requisite service period.
A summary of stock option activity for the year ended December 31, 2011 is as follows:
Shares
Outstanding at December 31, 2010
1,170,500
$ 15.42
5.1
$
2,349
Granted
-
$ -
Exercised
(27,499)
6.51
$
121
Forfeited
(13,251)
11.26
Expired
(7,251)
17.41
Outstanding at December 31, 2011
1,122,499
$ 15.68
3.8
$
1,374
Exercisable at December 31, 2011
(1)
1,052,249
$ 15.89
3.5
$
1,360
(1) Includes in-the-money opt ions totaling 357,499 shares at a weighted-average exercise price of $5.68.
Aggregate
Intrinsic Value
(in thousands)
Weighted-
Average
Exercise
Weighted-
Average
Remaining
The Company’s option awards allow employees to exercise options through cash payment to the Company for the shares
of common stock or through a simultaneous broker-assisted cashless exercise of a share option, through which the employee
authorizes the exercise of an option and the immediate sale of the option shares in the open market. The Company uses
newly-issued shares of common stock to satisfy its share-based payment obligations.