Frontier Airlines 2005 Annual Report Download - page 100

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Stock Options
In connection with employment agreements for certain key employees, Republic granted options to purchase shares of
Republic's common stock. The stock options vest ratably over the term of the employment agreements (generally 48 months) and are
exercisable for five years following the vesting dates. Generally, stock options are granted with exercise prices equal to market prices
on the grant date. Because stock options granted in August 2001 had an exercise price below market price, annual compensation
expense of $125, $214 and $214 was recorded for the years ended December 31, 2005, 2004 and 2003, respectively. Options granted
during 2004 vest ratably over periods ranging from 8 months to 48 months, and are exercisable until 10 years from the date of grant.
During 2005, the options granted vest ratably over periods ranging from 12 months to 48 months, and are exercisable until 10 years
from the date of grant. The following is a summary of stock option activity for stock options outstanding at the end of the respective
years:
December 31,
2005
December 31,
2004
December 31,
2003
Options
Weighted
Average
Exercise
Price
Options
Weighted
Average
Exercise
Price Options
Weighted
Average
Exercise
Price
Outstanding, beginning of year 2,781,864 $ 7.76 1,920,000 $ 2.13 1,920,000 $ 2.13
Granted 259,000 14.18 1,420,620 13.00
Exercised 416,429 2.86 558,756 1.75
Outstanding, end of year 2,624,435 $ 9.17 2,781,864 $ 7.76 1,920,000 $ 2.13
Weighted average remaining
contractual life in years 6.3 6.3 2.7
Options exercisable, end of year 1,709,700 $ 4.07 1,409,892 $ 2.72 1,872,500 $ 1.99
The weighted average grant date fair value of options granted in 2005 and 2004 was $14.18 and $3.32, respectively. No
options were granted during 2003. The following represents options outstanding and exercisable as of December 31, 2005 by exercise
price:
Options Outstanding Options Exercisable
Exercise Price
Number
Average
Remaining
Contractual Life
Weighted-Average
Exercise Price
Number
Weighted-Average
Exercise Price
$1.75 870,363 1.6 $1.75 870,363 $1.75
7.83 110,000 2.9 7.83 110,000 7.83
13.00 1,385,072 8.8 13.00 723,004 13.00
13.18 15,000 9.7 13.18 1,250 13.18
14.24 244,000 9.9 14.24 5,083 14.24
2,624,435 9.17 1,709,700 6.94
-62-
Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, February 27, 2006 Powered by Morningstar® Document Research℠