Nautilus 2001 Annual Report Download - page 54

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9. STOCK OPTIONS
The Company's stock-based compensation plan was adopted in June 1995. The Company can issue both nonqualified stock options to the
Company's officers, directors and employees, and incentive stock options to the Company's employees. The plan was amended in June 2000 so
the Company may grant options for up to 7,958,118 shares of common stock. At December 31, 2001, 2,377,954 shares are available for future
issuance under the plan. The plan is administered by the Company's Board of Directors which determines the terms and conditions of the
various grants awarded under these plans. Stock options granted generally have an exercise price equal to the closing market price of the
Company's stock on the day before the date of grant, and vesting periods vary by option granted, generally no longer than four years. If
compensation cost on stock options granted under these plans had been determined based on the fair value of the options consistent with that
described in SFAS No. 123, the Company's net income and earnings per share would have been reduced to the pro forma amounts indicated
below for the years ended December 31, 1999, 2000 and 2001.
1999 2000 2001
-------------- -------------- --------------
Net income, as reported ..................... $ 20,342,891 $ 41,626,094 $ 66,582,664
Net income, pro forma ....................... 19,958,204 40,500,561 64,340,210
Basic earnings per share, as reported ....... $ 0.59 $ 1.18 $ 1.89
Basic earnings per share, pro forma ......... $ 0.58 $ 1.15 $ 1.83
Diluted earnings per share, as reported ..... $ 0.58 $ 1.15 $ 1.85
Diluted earnings per share, pro forma ....... $ 0.57 $ 1.13 $ 1.79
The pro forma amounts may not be indicative of the effects on reported net income for future years due to the effect of options vesting over a
period of years and the granting of stock compensation awards in future years.
The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following
weighted-average assumptions used for the grants in 1999, 2000 and 2001:
1999 2000 2001
-------------------- ------------------ -------------------
Granted option vesting All as scheduled All as scheduled All as scheduled
Dividend yield None None None
Risk-free interest rate 6.4% 5.0% 4.4%
Expected volatility 60% 51% 67%
Expected option lives 5 years 5 years 5 years
Weighted-average fair value of options
granted $2,000,003 $4,564,198 $8,128,933
A summary of the status of the Company's stock option plans as of December 31, 1999, 2000 and 2001, and changes during the years ended on
those dates is presented below.
49
2002. EDGAR Online, Inc.