Airtran 2001 Annual Report Download - page 35

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The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have
no
vesting restrictions and
are fully transferable.
In
addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility.
Because our employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's opinion, the existing models
do
not necessarily provide areliable
single measure of the fair value of its employee stock options.
For purposes
of
pro forma disclosures, the estimated fair value of the options is amortized to expense over the options' vesting period.
Our pro forma information is as follows:
(In
thousands, except
per
share data)
Pro forma net income (loss)
Pro forma earnings (loss)
per
common share:
Basic
Diluted
2001
$(6,136)
$(0.09)
$(0.09)
2000
$45,059
$0.69
$0.65
1999
$(102,173)
$(1.57)
$(1.57)
The pro forma net income (loss) and earnings (loss) per common share information presented above renect stock options granted during 1995 and
in later years, in accordance with SFAS 123. Accordingly, the
full
effect of calculating compensation expense for stock options under
SFAS
123 is not
reflected
in
the pro forma net income (loss) and earnings
(loss)
per common share amounts above, because compensation expense
is
recognized over
the stock option's vesting period and compensation expense for stock options granted prior to January
1,
1995, is not considered.
Asummary of stock option activity under the aforementioned plans
is
as
follows:
Weighted-
Average
Options Price Range Price
Balance at December
31,
1998 6,790,980 $0.17
-23.19
$4.71
Granted 2,571,000
3.03-
6.41
3.52
Exercised (226.420)
0.17-
5.50 4.56
Canceled (495,040)
3.13-21.50
7.04
Balance at December
31,
1999 8,640,520
0.17-23.19
4.16
Granted 1,097,500
4.00-
4.75 4.28
Exercised (63,000)
0.17-
3.88 3.02
canceled (570,760)
3.31-21.50
5.46
Balance at December
31,
2000 9,104,260
0.17-23.19
4.17
Granted 1,721,600
6.08-11.00
7.14
Exercised (1,459,656)
0.17-
8.25 3.48
Ganceled (100,365)
4.00-21.38
6.59
Balance
at
December
31,2001
9,265,839
$0.17-23.19
$4.79
Exercisable
at
December
31,
2001
6,614,849
$0.17-23.19
$4.51