Cash America 2001 Annual Report Download - page 33

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31
A summary of the Company’s stock option activity for the three years ending December 31, 2001 is as follows (shares in thousands):
2001 2000 1999
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Prices Shares Prices Shares Prices
Outstanding at beginning of year 3,994 $ 8.32 3,729 $ 7.59 4,228 $ 7.41
Granted 155 6.18 977 10.11 137 13.78
Exercised 7 9.03 607 6.42 545 7.23
Forfeited 145 10.45 103 10.23 84 10.98
Expired —— 2 7.13 7 7.75
Outstanding at end of year 3,997 $ 8.16 3,994 $ 8.32 3,729 $ 7.59
Exercisable at end of year 2,814 $ 7.36 2,618 $ 7.13 2,947 $ 6.83
Weighted average fair value of options granted $ 4.88 $ 6.32 $ 7.36
The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes option-pricing model using the following weighted
average assumptions:
2001 2000 1999
Expected term (years) 8.0 7.3 8.8
Risk-free interest rate 5.12% 6.70% 5.29%
Expected dividend yield 0.81% 0.42% 0.50%
Expected volatility 58.0% 49.2% 36.8%
Stock options outstanding and exercisable as of December 31, 2001 are summarized below (shares in thousands):
Options Outstanding Options Exercisable
Weighted
Weighted Average Years Weighted
Range of Number Average of Remaining Number Average Exercise
Exercise Prices Outstanding Exercise Price Contractual Life Exercisable Price
$5.63 to $7.00 2,126 $ 6.30 3.2 1,993 $ 6.32
$7.01 to $10.81 1,690 9.88 6.1 730 9.36
$10.82 to $16.69 181 13.91 6.8 91 14.07
$ 5.63 to $16.69 3,997 $ 8.16 4.6 2,814 $ 7.36
The Company applies the intrinsic value based method of accounting for the Plans and, accordingly, no compensation cost has been recognized. If compensa-
tion costs for the Company’s stock options had been determined on the fair value based method of accounting discussed above, the Company’s net income (loss) and
related amounts per share basic and diluted for each of the years ended December 31 would have been reported as follows (in thousands except per share amounts):
2001 2000 1999
Net income (loss)
As reported $ (5,906) $ (1,730) $ 3,876
Pro forma (6,943) (3,530) 3,076
Net income (loss) per share
Basic:
As reported $ (.24) $ (.07) $ .15
Pro forma (.28) (.14) .12
Diluted:
As reported (.24) (.07) .15
Pro forma (.28) (.14) .12
The effects of applying the fair value based method of accounting in the pro forma amounts above are not indicative of future effects and its application does not
apply to awards granted prior to 1995.
Notes to Consolidated Financial Statements — Continued