Support.com 2011 Annual Report Download - page 50


Expected Dividend: We use a dividend yield of zero, as we have never paid cash dividends and do not expect to pay dividends in the future.
The fair value of our stock-based awards was estimated using the following assumptions for the years ended December 31, 2011, 2010 and
2009:
     
                 
Risk-free interest rate 1.0% 1.7% 2.0% 0% n/a n/a
Expected term (in years) 3.6 3.6 3.6 0.5 n/a n/a
Volatility 59.2% 66.6% 63.1% 75.3% n/a n/a
Expected dividend 0% 0% 0% 0% n/a n/a
Weighted average grant-date fair value $ 1.63 $ 1.71 $ 1.12 $ 0.77 n/a n/a
In the second quarter of 2009 we sold our Enterprise business to Consona. This sale qualified as the sale of “substantially all the assets of the
business,” and according to the terms of our Employee Stock Purchase Plan (“”) plan document, such a sale terminated the ESPP. In the second
quarter of 2011, to advance the interests of the Company and its stockholders by providing an incentive to attract, retain and reward eligible employees
and by motivating such persons to contribute to the growth and profitability of the Company, the Company’s Board of Directors and stockholders
approved a new Employee Stock Purchase Plan and reserved 1,000,000 shares of our common stock for issuance effective as of May 15, 2011.
We recorded the following stock-based compensation expense for the fiscal years ended December 31, 2011, 2010 and 2009 (in thousands):
  
        
Stock option compensation expense recognized in:
Cost of service $ 222 $ 168 $ 130
Cost of software and others 28 1 —
Research and development 806 588 465
Sales and marketing 581 693 575
General and administrative 2,088 1,881 1,763
3,725 3,331 2,933
ESPP compensation expense recognized in:
Cost of service 23 — 3
Cost of software and others 1 — —
Research and development 10 — 2
Sales and marketing 5 — 2
General and administrative 5 — 2
44 — 9
Stock-based compensation expense included in total costs and expenses $ 3,769 $ 3,331 $ 2,942
Net cash proceeds from the exercise of stock options were $450,000, $4.5 million and $358,000 for the years ended December 31, 2011, 2010
and 2009, respectively. No income tax benefit was realized from stock option exercises during the years ended December 31, 2011, 2010 and 2009,
respectively. In accordance with ASC 718, we present excess tax benefits from the exercise of stock options, if any, as net cash generated in financing
activities.

Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the
estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their
respective tax bases, and operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect
for the year in which those temporary differences are expected to be reversed or settled. The effect on deferred tax assets and liabilities of a change in
tax rates is recognized in the consolidated statements of operations in the period that includes the enactment date. A valuation allowance is recorded to
reduce the carrying amounts of deferred tax assets, if it is more likely than not, that such assets will not be realized.
48
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.