Alaska Airlines and Horizon Air 2014 Annual Report Download - page 177
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Unrecognized stock-based compensation for non-vested options and awards and the weighted-average
period the expense will be recognized (in millions):
Amount
Weighted-
Average
Period
Stock options $2 0.8
Stock awards 80.6
Unrecognized stock-based compensation $10 0.7
The Company has various equity incentive plans under which it may grant stock awards to directors,
officers and employees. The Company also has an employee stock purchase plan (ESPP).
The Company is authorized to issue 36 million shares of common stock under these plans, of which
16,914,785 shares remain available for future grants of either options or stock awards as of
December 31, 2014.
Stock Options
Stock options to purchase common stock are granted at the fair market value of the stock on the date
of grant. The stock options granted have terms of up to ten years.
The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-
pricing model with the following weighted-average assumptions used for grants:
2014 2013 2012
Expected volatility 65% 67% 55%
Expected term 6 years 6 years 6 years
Risk-free interest rate 1.87% 1.10% 1.08%
Expected dividend yield 1.25 ––
Weighted-average grant date fair value per share $ 21.70 $ 14.74 $ 8.62
Estimated fair value of options granted (millions) $3$3$2
The expected market price volatility is based on the historical volatility. The expected term is based on
the estimated period of time until exercise based on historical experience. The risk-free interest rate is
based on the U.S. Treasury yield curve in effect at the time of the grant. The expected dividend yield is
based on the estimated weighted average dividend yield over the expected term. The expected forfeiture
rates are based on historical experience.
93
ŠForm 10-K