Lumber Liquidators 2008 Annual Report Download - page 66

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The following are the ranges of assumptions for the periods noted:
Year Ended December 31,
2008 2007 2006
Expected dividend rate ............................................. Nil Nil Nil
Expected stock price volatility ....................................... 39% 35-39% 35%
Risk-free interest rate .............................................. 3.2-3.7% 4.2-4.6% 4.6-5.2%
Expected term of options ........................................... 7.5years 7.5 years 7.5 years
The expected stock price volatility range is based on the historical volatilities of companies included in a
peer group that was selected by management whose shares or options are publicly available. The volatilities are
estimated for a period of time equal to the expected life of the related option. The risk-free interest rate is based
on the implied yield of U.S. Treasury zero-coupon issues with an equivalent remaining term. The expected term
of the options represents the estimated period of time until exercise and is determined by considering the
contractual terms, vesting schedule and expectations of future employee behavior.
Stock options outstanding and exercisable as of December 31, 2008 are summarized below:
Outstanding Exercisable
Range of Exercise Prices
Number of
Option
Shares
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Life (Years)
Number of
Option
Shares
Weighted
Average
Exercise
Price
$ 6.50 – $ 7.83 ............................... 1,790,347 $ 7.67 7.7 1,136,529 $ 7.66
$ 8.25 – $15.22 ............................... 435,760 10.73 9.1 43,750 10.78
Balance, December 31, 2008 .................... 2,226,107 $ 8.27 8.0 1,180,279 $ 7.78
Restricted Stock Awards
Shares
Weighted
Average Grant
Date Fair Value
Nonvested, December 31, 2006 .................................. — $ —
Granted ................................................. 88,830 8.95
Released ................................................ — —
Forfeited ................................................ (7,530) 8.95
Nonvested, December 31, 2007 .................................. 81,300 8.95
Granted ................................................. 97,092 13.49
Released ................................................ (34,184) 12.46
Forfeited ................................................ (11,435) 9.27
Nonvested, December 31, 2008 .................................. 132,773 $11.33
As of December 31, 2008, total unrecognized compensation cost related to unvested restricted stock awards
was approximately $507, net of estimated forfeitures, which we expected to recognized over a weighted average
period of approximately 2.5 years.
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