CompUSA 2013 Annual Report Download - page 61

The 2006 Stock Incentive Plan For Non-Employee Directors - This plan, adopted by the Company’
s stockholders in October, 2006, replaces
the 1995 Stock Option Plan for Non-
Employee Directors. The Company adopted the plan so that it could offer directors of the Company
who are not employees of the Company or of any entity in which the Company has more than a 50% equity interest (“
independent
directors”)
an opportunity to participate in the ownership of the Company by receiving options to purchase shares of common stock at a
price equal to the fair market value at the date of grant of the option and restricted stock awards. Awards for a maximum of 200,000 shares
may be granted under this plan. A total of 15,000 options were outstanding under this plan as of December 31, 2013.
The 2010 Long-term Stock Incentive Plan (“2010 Plan”) -
This plan was adopted in April, 2010 with substantially the same terms and
provisions as the 1999 Long-
term Stock Incentive Plan. The maximum number of shares granted per type of award to any individual may
not exceed 1,500,000 in any calendar year. Restricted stock grants and common stock awards reduce stock options otherwise available for
future grant. Awards for a maximum of 7,500,000
shares may be granted under this plan. A total of 565,500 options and 292,500 restricted
stock units were outstanding under this plan as of December 31, 2013.
Shares issued under our share-based compensation plans are usually issued from shares of our common stock held in the treasury.
The fair value of employee share options is recognized in expense over the vesting period of the options, using the graded attribution
method. The fair value of employee share options is determined on the date of grant using the Black-
Scholes option pricing model. The
Company has used historical volatility in its estimate of expected volatility. The expected life represents the period of time (in years) for
which the options granted are expected to be outstanding. The risk-free interest rate is based on the U.S. Treasury yield curve.
Compensation cost related to non-
qualified stock options recognized in operating results (selling, general and administrative expense) for
2013, 2012 and 2011 was $1.1 million, $2.5 million, and $1.0 million respectively. The related future income tax benefits recognized for
2013, 2012 and 2011 were $0.4 million, $1.4 million and $0.6 million, respectively.
Stock options
The following table presents the weighted-average assumptions used to estimate the fair value of options granted in 2013, 2012 and 2011:
The following table summarizes information concerning outstanding and exercisable options:
The total intrinsic value of options exercised was $0.2 million, $1.4 million and $0.7 million respectively, for 2013, 2012 and 2011.
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Table of Contents
2013
2012
2011
Expected annual dividend yield
0
%
0
%
0
%
Risk
-
free interest rate
1.66
%
1.10
%
2.02
%
Expected volatility
41.1
%
57.3
%
59.8
%
Expected life in years
7.88
6.3
8.0
Weighted Average
2013
2012
2011
Shares
Exercise
Price
Shares
Exercise
Price
Shares
Exercise
Price
Outstanding at beginning of year
1,353,059
$
15.88
1,285,115
$
13.39
1,900,698
$
10.60
Granted
60,000
$
9.54
772,500
$
15.00
277,000
$
12.61
Exercised
(34,310
)
$
3.04
(109,466
)
$
3.12
(67,758
)
$
4.18
Cancelled or expired
(203,250
)
$
14.84
(595,090
)
$
11.71
(824,825
)
$
7.45
Outstanding at end of year
1,175,499
$
16.11
1,353,059
$
15.88
1,285,115
$
13.39
Options exercisable at year end
772,749
682,809
914,365
Weighted average fair value per option
granted during the year
$
4.44
$
7.90
$
7.81