Incredimail 2013 Annual Report Download - page 111

Download and view the complete annual report

Please find page 111 of the 2013 Incredimail annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 259

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193
  • 194
  • 195
  • 196
  • 197
  • 198
  • 199
  • 200
  • 201
  • 202
  • 203
  • 204
  • 205
  • 206
  • 207
  • 208
  • 209
  • 210
  • 211
  • 212
  • 213
  • 214
  • 215
  • 216
  • 217
  • 218
  • 219
  • 220
  • 221
  • 222
  • 223
  • 224
  • 225
  • 226
  • 227
  • 228
  • 229
  • 230
  • 231
  • 232
  • 233
  • 234
  • 235
  • 236
  • 237
  • 238
  • 239
  • 240
  • 241
  • 242
  • 243
  • 244
  • 245
  • 246
  • 247
  • 248
  • 249
  • 250
  • 251
  • 252
  • 253
  • 254
  • 255
  • 256
  • 257
  • 258
  • 259

PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
The Company accounts for stock-based compensation under ASC 718, "Compensation -
Stock Compensation", which
requires the measurement and recognition of compensation expense based on estimated fair values for all share-
based
payment awards made to employees and directors.
ASC 718 requires companies to estimate the fair value of equity-
based payment awards on the date of grant using an
option-
pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense
over the requisite service periods in the Company's consolidated statement of income. ASC No. 718 requires forfeitures to
be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those
estimates.
The Company recognizes compensation expenses for the value of its awards, which have graded vesting based on service
conditions, using the straight line method, over the requisite service period of each of the awards, net of estimated
forfeitures. Estimated forfeitures are based on actual historical pre-vesting forfeitures.
The Company estimates the fair value of standard stock options granted using the Binomial option-
pricing model. The
option-
pricing models require a number of assumptions, of which the most significant are; volatility and the expected
option term. Expected volatility was calculated based upon actual historical stock price movements. The expected option
term was calculated based on the Company’
s assumptions of early exercise multiples which were calculated based on
comparable companies and termination exit rate which was calculated based on actual historical data. The expected option
term represents the period that the Company’s stock options are expected to be outstanding. The risk-
free interest rate is
based on the yield from U.S. Treasury zero-
coupon bonds with an equivalent term. The fair value of the RSU's is based on
the market value of the underlying shares at the date of grant.
In November 2010 the Company's Board decided to change its dividend policy so that beginning with earnings of 2011
and beyond, the Company does not intend to declare and distribute any dividends.
NOTE 2:
-
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
q.
Accounting for stock
-
based compensation:
F
-
19