Notes to Consolidated Financial Statements
for the Three Years in the Period Ended June 30, 1999
14. STOCK OPTIONS
The Company has stock option plans for the benefit of officers, other
key employees and directors. As of June 30, 1999, the plans were
authorized to grant options to purchase 207,487 additional shares of
the Company's common stock. The stock options are exercisable at
any time within the maximum term of 10 years and one day from the
grant date. The options are nontransferable and are forfeited upon
termination of employment.
The following is an analysis of the stock option activity for each of
the years in the three year period ended June 30, 1999, and the stock
options outstanding at the end of the respective periods:
As of June 30, 1999, options outstanding have exercise prices between
$2.52 and $26.56 and a weighted average remaining contractual life
of 6.4 years. The majority of options outstanding have exercise prices
ranging from $10.62 to $26.56 with a weighted average remaining
contractual life of 7.6 years.
The Company applies APB Opinion No. 25,"Accounting for Stock
Issued to Employees," and related interpretations in accounting for the
plan. No compensation cost has been recognized for the plan, because
the stock option price is equal to or greater than the fair value at the
grant date. Had compensation cost for the plan been determined
based on the fair value at the grant dates for awards under the plan
consistent with the fair value method of SFAS 123,"Accounting for
Stock-Based Compensation," the Company's net income and net
income per share would have decreased to the pro forma amounts
indicated below: (in thousands, except per share data)
The weighted average fair value of options granted was $5.94 in 1999,
$8.04 in 1998 and $5.44 in 1997. The fair value of the option grants is
estimated on the date of grant using an option pricing model with the
following assumptions: dividend yield ranging from 1.32% to 2.17%,
risk-free interest rates ranging from 4.50% to 8.04%, expected
volatility ranging from 25.53% to 30.13% and expected life of 5.04 to
5.39 years. The pro forma amounts are not representative of the effects
on reported net income for future years.
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