Nautilus 2005 Annual Report Download - page 52

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Table of Contents
Stock Options
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 2005, 2004 and 2003:
A summary of the Company’s stock option plans as of December 31, 2005, 2004 and 2003, and changes during the years ended on those
dates is presented below.
The following table summarizes information about stock options outstanding as of December 31, 2005:
Performance Units
2005 2004 2003
Dividend yield
2.2
%
2.5
%
3.5
%
Risk
-
free interest rate
4.2
%
4.3
%
3.9
%
Expected volatility
65.0
%
48.0
%
59.0
%
Expected option lives
5.0 years
5.5 years
10 years
Weighted
-
average fair value of options granted per share
$
11.10
$
7.41
$
4.75
Weighted-average fair value of options granted below market
price per share
$
—
$
—
$
4.83
2005 2004 2003
Shares
Weighted-
Average
Exercise
Price
Shares
Weighted-
Average
Exercise
Price
Shares
Weighted-
Average
Exercise
Price
Outstanding at beginning of year
2,748,563
$
15.54
2,665,503
$
13.92
1,599,987
$
17.26
Granted
332,500
24.56
1,265,650
18.84
1,430,000
9.36
Forfeited or canceled
(341,400
)
20.81
(640,280
)
18.23
(132,633
)
21.79
Exercised
(462,553
)
12.86
(542,310
)
12.11
(231,851
)
4.22
Outstanding at end of year
2,277,110
$
17.39
2,748,563
$
15.54
2,665,503
$
13.92
Options exercisable at end of year
721,886
677,942
792,796
Options Outstanding Options Exercisable
Range of Exercise
Prices
Number
Outstanding
Average
Remaining
Contractual
Life (Years)
Weighted
-
Average
Exercise
Price
Number of
Shares
Exercisable
Weighted
-
Average
Exercise
Price
$10.39
799,500
7.54
$
10.39
210,500
$
10.39
$11.91
-
$15.66
470,850
7.92
14.79
152,185
14.61
$15.71
-
$23.02
302,910
6.09
21.01
118,035
21.34
$23.15
442,750
8.82
23.15
115,066
23.15
$23.36
-
$34.05
250,100
4.50
29.19
115,100
32.27
$37.70
11,000
1.29
37.70
11,000
37.70
$10.39
-
$37.70
2,277,110
7.31
$
17.39
721,886
$
19.15
The Company granted performance units during 2005 which entitles the Company’s President and Chief Executive Officer to receive a
share of the Company’s common stock for each performance unit, for any completed fiscal year in which certain targets are met. The
Company’s stock price on the date of the grant was $17.70 per share and 125,000 performance units were issued and outstanding at December
31, 2005. The targets established are related to (1) the Company’s Earnings Per Share reaching certain targets and (2) meeting or exceeding
certain growth objectives in the Company’s Earnings Per Share. The Company recognized $1,106 as unearned compensation in the
consolidated statement of shareholders’ equity for the performance units granted in 2005. The Company recorded expense of $23 related to
amortizing this unearned compensation in 2005.
51