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Year |
Number of options eligible for vesting |
Number of options expected to vest |
Calculation |
1 |
100 |
95 |
= 100 × .95 |
2 |
100 |
90 |
= 100 × .95 × .95 |
3 |
100 |
86 |
= 100 × .95 × .95 × .95 |
4 |
100 |
81 |
= 100 × .95 × .95 × .95 × .95 |
Totals |
400 |
352 |
20X1 |
20X2 |
20X3 |
|
Number of options |
5,000 |
5,000 |
5,000 |
Fair value per option |
$8.00 |
$8.00 |
$8.00 |
Fair value of total options |
$40,000 |
$40,000 |
$40,000 |
Percentage expected to vest |
95% |
95% |
45% |
Total expected compensation cost |
$38,000 |
$38,000 |
$18,000 |
Portion of service period completed at year-end |
33% |
67% |
100% |
Cumulative compensation cost recognized at year-end |
$12,540 |
$25,460 |
$18,000 |
Cumulative compensation cost previously recognized |
$— |
$12,540 |
$25,460 |
Current-period expense/ (income) (pre-tax) |
$12,540 |
$12,920 |
$(7,460) |
20X1 |
20X2 |
20X3 |
|
Number of options |
5,000 |
5,000 |
5,000 |
Fair value per option |
$8.00 |
$8.00 |
$8.00 |
Fair value of total options |
$40,000 |
$40,000 |
$40,000 |
Percentage expected to vest |
90% |
95% |
75% |
Total expected compensation cost |
$36,000 |
$38,000 |
$30,000 |
Portion of service period completed at year-end |
33% |
67% |
100% |
Cumulative compensation cost recognized at year-end |
$11,880 |
$25,460 |
$30,000 |
Cumulative compensation cost previously recognized |
$— |
$11,880 |
$25,460 |
Current-period expense (pre-tax) |
$11,880 |
$13,580 |
$4,540 |
20X1 |
20X2 |
20X3 |
|
Number of options |
5,000 |
5,000 |
5,000 |
Fair value per option |
$4.50 |
$4.50 |
$4.50 |
Fair value of total options |
$22,500 |
$22,500 |
$22,500 |
Percentage expected to complete requisite service period |
95% |
95% |
90% |
Total expected compensation cost |
$21,375 |
$21,375 |
$20,250 |
Portion of service period completed at year-end |
33% |
67% |
100% |
Cumulative compensation cost recognized at year-end |
$7,054 |
$14,321 |
$20,250 |
Cumulative compensation cost previously recognized |
$— |
$7,054 |
$14,321 |
Current-period expense (pre-tax) |
$7,054 |
$7,267 |
$5,929 |
20X1 |
20X2 |
20X3 |
|
Number of options not yet forfeited - beginning of year |
5,000 |
5,000 |
4,250 |
Number of options forfeited during the year |
0 |
750 |
500 |
Number of options not yet forfeited - end of year |
5,000 |
4,250 |
3,750 |
Fair value per option |
$8.00 |
$8.00 |
$8.00 |
Fair value of unforfeited options |
$40,000 |
$34,000 |
$30,000 |
Portion of service period completed at year end |
33% |
67% |
100% |
Cumulative compensation cost recognized at year end |
$13,200 |
$22,780 |
$30,000 |
Cumulative compensation cost previously recognized |
0 |
13,200 |
22,780 |
Current period expense |
$13,200 |
$9,580 |
$7,220 |
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