INTL FCStone 2005 Annual Report Download - page 74

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INTERNATIONAL ASSETS HOLDING CORPORATION AND SUBSIDIARIES
Notes to the Consolidated Financial Statements—(Continued)
September 30, 2005 and 2004
Nonqualified Stock Options
As of September 30, 2005, options outstanding under nonqualified options, including their grant date,
exercise price and expiration date, were as follows:
Options
outstanding
Grant
date
Exercise
price
Expiration
date Exercisable
11,990 July 20, 1998 $2.40 July 20, 2008 A
11,990 January 6, 1999 $1.25 January 6, 2009 A
7,500 March 9, 2001 $3.13 March 9, 2011 B
15,000 October 5, 2001 $0.90 October 5, 2011 C
156,748 March 7, 2003 $2.50 March 7, 2013 C
10,000 May 11, 2004 $6.51 May 11, 2008 D
20,000 June 8, 2005 $6.23 June 8, 2009 D
233,228
(A) Exercisable at 20% per year beginning one year from the date of grant.
(B) Exercisable at 33.3% after year one, 33.3% after year two and 33.4% after year three.
(C) Exercisable at 33.3% after year one, 33.3% after year two and 33.4% after year three. These options are
100% exercisable upon a change in control of the Company.
(D) Exercisable at 33% after year one, 33% after year two and 34% after year three.
As of September 30, 2005 and 2004, non-qualified options covering 154,278 and 164,598 shares,
respectively, were exercisable. During the years ended September 30, 2005 and 2004, non-qualified options
covering 80,900 and 28,000 shares were exercised with a weighted average price of $2.58 and $2.71,
respectively.
Warrants
In 2004, the Company issued warrants covering 200,000 shares of common stock to the placement agent for
the Company’s offering of $12,000,000 in Notes. The warrants are exercisable by the holder at any time prior to
June 30, 2007. The Company may, at its option, require the warrant-holder to exercise all or any of the warrants
in the event that all of the following conditions are fulfilled: (i) the closing price of the Company’s common
stock exceeds $9.00 per share for a period of twenty (20) consecutive trading days; (ii) the Company files a
registration statement under the Securities Act of 1933, as amended, to register the resale of the shares of
common stock issuable upon the exercise of the warrants; and (iii) such registration statement is declared
effective by the Securities and Exchange Commission. The warrants will be exercisable at an exercise price equal
to $6.00, subject to customary adjustment provisions. The conversion rights of the warrants were approved by the
shareholders on March 26, 2004.
The Black-Scholes valuation of the warrants as of March 2004 was $893,121 ($6.00 strike price, 3 year life,
risk free interest rate 2.27%) for the 200,000 warrants issued to the placement agent for placement agent services.
In March 2004, this $893,121 value was charged to debt issuance costs and amortized over the life of the
convertible subordinated notes (through December 31, 2014) and charged to interest expense. In August 2004,
upon conversion of the subordinated notes to common shares, the unamortized balance was charged to additional
paid in capital.
F-34