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Note 7. Stock-Based Compensation
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Dec. 31, 2011
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| Disclosure of Compensation Related Costs, Share-based Payments [Text Block] |
Note
7. Stock-Based Compensation
The
Company accounts for share-based awards exchanged for
employee services at the estimated grant date fair value of
the award. The Company amortizes the fair value of employee
stock options on a straight-line basis over the requisite
service period of the awards. Compensation expense
includes the impact of an estimate for forfeitures for all
stock options.
Employee
stock-based compensation expense is as follows (in
thousands):
No
income tax benefit has been recognized related to stock-based
compensation expense and no tax benefits have been realized
from exercised stock options.
The
Company estimated the fair value of employee stock options
using the Black-Scholes option pricing model. The fair value
of employee stock options is being amortized on a
straight-line basis over the requisite service periods of the
respective awards. The fair value of employee
stock options was estimated using the following
weighted-average assumptions:
The
weighted-average fair value of options granted during the
three months ended December 31, 2011 and 2010 was $0.93 and
$1.22, respectively. The weighted-average fair value of
options granted during the nine months ended December 31,
2011 and 2010 was $1.15 and $1.34, respectively.
The
expected term of stock options represents the average period
the stock options are expected to remain outstanding and is
based on the expected term calculated using the approach
prescribed by the Securities and Exchange
Commission's Staff Accounting Bulletin No. 107 for
“plain vanilla” options. The expected stock price
volatility for the Company’s stock options was
determined by examining the historical volatilities for
industry peers and using an average of the historical
volatilities of the Company’s industry peers. The
Company will continue to analyze the stock price volatility
and expected term assumptions as more data for the
Company’s common stock and exercise patterns become
available. The risk-free interest rate assumption is based on
the U.S. Treasury instruments whose term was consistent with
the expected term of the Company’s stock
options. The expected dividend assumption is based
on the Company’s history and expectation of dividend
payouts. The Company estimates forfeitures based on
historical experience and reduces compensation expense
accordingly. The estimated forfeiture rates used during the
three months ended December 31, 2011 ranged from 0.53% to
2.39%.
At
December 31, 2011, there were unrecognized compensation costs
of $2,047,000 related to stock options which are expected to
be recognized over a weighted-average amortization period of
1.94 years.
The
Company did not capitalize any cost associated with
stock-based compensation.
The
Company issues new shares of common stock upon exercise of
stock options.
A summary of all option
activity as of December 31, 2011 and changes during the nine
months then ended is presented below:
The
aggregate intrinsic value is calculated as the difference
between the exercise price of the stock options and the
underlying fair value of the Company’s common stock
($1.05) for stock options that were in-the-money as of
December 31, 2011.
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