Audiovox 2010 Annual Report Download - page 76

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Audiovox Corporation and Subsidiaries
Notes to Consolidated Financial Statements, continued
February 28, 2010
(Dollars in thousands, except share and per share data)
In addition, the Company issued 17,500 warrants in September of 2009 to purchase the Company’s common stock with
the same terms as those above as consideration for future legal services. Accordingly, the Company recorded additional
legal expense in the amount of approximately $22 for the year ended February 28, 2010, representing the fair value of
the warrants issued. These warrants are included in the outstanding options and warrant table below and considered
exercisable at February 28, 2009.
The Company granted 20,000 options during July 2009, which vested one-half on August 31, 2009 and one half on
November 30, 2009, expire two years from date of vesting (August 31, 2011 and November 30, 2011, respectively),
have an exercise price of $7.48 equal to the sales price of the Company’s stock on the day prior to the date of the grant,
have a contractual life of 2.2 years and a grant date fair value of $2.94 per share.
In addition, the Company issued 17,500 warrants to purchase the Company’s common stock at an exercise price of
$10.90 per share as consideration for past legal services rendered. The warrants are exercisable immediately, expire three
years from date of issuance and have a fair value on issuance date of $3.26 per warrant determined based upon a
Black-Sholes valuation model (refer to the table below for assumptions used to determine fair value). Accordingly, the
Company recorded additional legal expense in the amount of approximately $57 during the year ended February 29,
2008, representing the fair value of the warrants issued. These warrants are included in the outstanding options and
warrant table below and considered exercisable at February 28, 2009.
The Company granted 197,250 options during October of 2008, which vested one-half on November 30, 2008 and
one-half on February 28, 2009, expire two years from date of vesting (November 30, 2010 and February 28, 2011,
respectively), have an exercise price equal to $4.83, the sales price of the Company’s stock on the day prior to the date of
grant, have a contractual term between 2.1 and 2.4 years and a grant date fair value of $1.44 per share determined based
upon a Black-Sholes valuation model (refer to the table below for assumptions used to determine fair value).
In addition, the Company issued 17,500 warrants during October of 2008 to purchase the Company’s common stock
with the same terms as those above as consideration for future legal services. Accordingly, the Company recorded
additional legal expense in the amount of approximately $26 for the year ended February 28, 2009, representing the fair
value of the warrants issued. These warrants are included in the outstanding options and warrant table below and
considered exercisable at February 28, 2009.
The Company granted 257,500 stock options during August 2007, which vest one-third on August 31, 2007, one-third on
November 30, 2007, and one-third on February 29, 2008, expire three years from date of vesting (August 31, 2010,
November 30, 2010, and February 28, 2011, respectively), have an exercise price equal to $1.00 above the lowest sales
price of the Company’s stock on the day prior to the date of grant ($10.90), have a contractual term between 2 years and
3.7 years and a grant date fair value of $3.26 per share determined based upon a Black-Sholes valuation model (refer to
the table below for assumptions used to determine fair value).
The per share weighted-average fair value of stock options granted during the years ended February 28, 2010
and February 28, 2009 was $2.48 and $1.44, respectively on the date of grant.
The fair value of stock options and warrants on the date of grant, and the assumptions used to estimate the fair value of
the stock options and warrants using the Black-Sholes option valuation model granted during the year was as follows:
Year Year Year
Ended Ended Ended
February 28, February 28, February 29,
2010 2009 2008
Dividend yield 0% 0% 0%
Volatility
55.9% -
69.0% 47.0% 47.0%
Risk-free interest rate
1.46% -
0.97% 5.0% 4.6%
Expected life (years) 3.7 and 2.2 2.0 2.0 - 3.0
49
Source: AUDIOVOX CORP, 10-K, May 14, 2010 Powered by Morningstar® Document Research℠