Classmates.com 2009 Annual Report Download - page 139

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Table of Contents
UNITED ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. STOCK-BASED COMPENSATION PLANS (Continued)
The fair value of employee stock purchase plan shares was estimated using the Black-Scholes option pricing model with the following
weighted-average assumptions:
The assumptions presented in the table above represent the weighted average of the applicable assumptions used to value employee stock
purchase plan shares. The Company calculates expected volatility based on historical volatility of the Company's common stock. The expected
term represents the amount of time remaining in the 24-month offering period. The risk-free interest rate assumed in valuing the employee stock
purchase plan shares is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term. The Company determines the
expected dividend yield percentage by dividing the expected annual dividend by the closing market price of United Online, Inc. common stock at
the date of grant.
For the years ended December 31, 2009, 2008 and 2007, the Company recognized $2.8 million, $1.1 million and $1.7, respectively, of
stock-based compensation related to the employee stock purchase plan. Total unrecognized compensation cost related to the employee stock
purchase plan at December 31, 2009 was approximately $1.7 million and was expected to be recognized over a weighted-average period of
0.6 years.
10. INCOME TAXES
Income (loss) before income taxes was comprised of the following (in thousands):
F-35
Year Ended December 31,
2009
2008
2007
Risk
-
free interest rate
0.8
%
2.4
%
4.5
%
Expected term (in years)
0.5
-
2.0
0.5
-
2.0
0.5
-
2.0
Dividend yield
6.9
%
6.3
%
6.4
%
Volatility
58.5
%
43.8
%
38.7
%
Year Ended December 31,
2009
2008
2007
Domestic
$
94,973
$
(60,061
)
$
100,828
Foreign
23,256
(11,309
)
(2,136
)
Income (loss) before
income taxes
$
118,229
$
(71,370
)
$
98,692