Dendreon (DNDN)

 

We account for stock-based compensation in accordance with Financial Accounting Standards Board (“FASB”) SFAS No. 123R, “Share-Based Payment” (“SFAS 123R”). Under the provisions of SFAS 123R, stock-based compensation cost is estimated at the grant date based on the award’s fair value as calculated by the Black-Scholes-Merton (“BSM”) option-pricing model and is recognized as expense over the requisite service period. The BSM model requires various highly judgmental assumptions including volatility, forfeiture rates and expected option life. If any of the assumptions used in the BSM model change significantly, stock-based compensation expense may differ materially in the future from that recorded in the current period.

 

We grant restricted stock awards that generally vest over a four year period, however, in 2006 and 2007, we granted restricted stock awards with certain performance conditions to all employees. In accordance with SFAS 123R, management is required to estimate the probability of achieving each acceleration provision. Compensation expense is recorded based upon our assessment of accomplishing each provision.

 

We recognize compensation expense for our stock-based payment awards on the accelerated method over the requisite service period of the entire award, unless the awards are subject to other conditions, in which case we recognize compensation expense over the requisite service period of each separate vesting tranche. We determine the grant date fair value of our stock option awards and Employee Stock Purchase Plan under SFAS 123R using the BSM option pricing model.

 

For additional information about stock-based compensation, see Note 10 to the Consolidated Financial Statements.

 

 

We account for stock-based compensation in accordance with
Financial Accounting Standards Board (“FASB”)
SFAS No. 123R, “Share-Based Payment”
(“SFAS 123R”). Under the provisions of
SFAS 123R, stock-based compensation cost is estimated at
the grant date based on the award’s fair value as
calculated by the Black-Scholes-Merton (“BSM”)
option-pricing model and is recognized as expense over the
requisite service period. The BSM model requires various highly
judgmental assumptions including volatility, forfeiture rates
and expected option life. If any of the assumptions used in the
BSM model change significantly, stock-based compensation expense
may differ materially in the future from that recorded in the
current period.

 

We grant restricted stock awards that generally vest over a four
year period, however, in 2006 and 2007, we granted restricted
stock awards with certain performance conditions to all
employees. In accordance with SFAS 123R, management is
required to estimate the probability of achieving each
acceleration provision. Compensation expense is recorded based
upon our assessment of accomplishing each provision.

 

We recognize compensation expense for our stock-based payment
awards on the accelerated method over the requisite service
period of the entire award, unless the awards are subject to
other conditions, in which case we recognize compensation
expense over the requisite service period of each separate
vesting tranche. We determine the grant date fair value of our
stock option awards and Employee Stock Purchase Plan under
SFAS 123R using the BSM option pricing model.

 

For additional information about stock-based compensation, see
Note 10 to the Consolidated Financial Statements.

 

 

We account for stock-based compensation in accordance with Financial Accounting Standards Board (“FASB”) SFAS No. 123R, “Share-Based Payment” (“SFAS 123R”). Under the provisions of SFAS 123R, stock-based compensation cost is estimated at the grant date based on the award’s fair value as calculated by the Black-Scholes-Merton (“BSM”) option-pricing model and is recognized on the accelerated method as expense over the requisite service period. The BSM model requires various highly judgmental assumptions including volatility, forfeiture rates and expected option life. If any of the assumptions used in the BSM model change significantly, stock-based compensation expense may differ materially in the future from that recorded in the current period.

 

We grant restricted stock awards that generally vest over a four year period, however in 2006 and 2007, we granted restricted stock awards with certain performance conditions to all employees. In accordance with SFAS 123R, management is required to estimate the probability of achieving each acceleration provision. Compensation expense is recorded based upon our assessment of accomplishing each provision.

 

SFAS 123R also requires the benefit of tax deductions in excess of recognized stock compensation expense to be reported as a financing cash flow, rather than as an operating cash flow. In each of the years ended December 31, 2008, 2007 and 2006, the tax deductions related to stock compensation expense were not recognized because of the availability of net operating losses, and therefore no such financing cash flows were reported.

 

 

We account for stock-based compensation in accordance with
Financial Accounting Standards Board (“FASB”)
SFAS No. 123R, “Share-Based Payment”
(“SFAS 123R”). Under the provisions of
SFAS 123R, stock-based compensation cost is estimated at
the grant date based on the award’s fair value as
calculated by the Black-Scholes-Merton (“BSM”)
option-pricing model and is recognized on the accelerated method
as expense over the requisite service period. The BSM model
requires various highly judgmental assumptions including
volatility, forfeiture rates and expected option life. If any of
the assumptions used in the BSM model change significantly,
stock-based compensation expense may differ materially in the
future from that recorded in the current period.

 

We grant restricted stock awards that generally vest over a four
year period, however in 2006 and 2007, we granted restricted
stock awards with certain performance conditions to all
employees. In accordance with SFAS 123R, management is
required to estimate the probability of achieving each
acceleration provision. Compensation expense is recorded based
upon our assessment of accomplishing each provision.

 

SFAS 123R also requires the benefit of tax deductions in
excess of recognized stock compensation expense to be reported
as a financing cash flow, rather than as an operating cash flow.
In each of the years ended December 31, 2008, 2007 and
2006, the tax deductions related to stock compensation expense
were not recognized because of the availability of net operating
losses, and therefore no such financing cash flows were reported.

 

 

In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123R, “Share-Based Payment” (“SFAS 123R”), which revised SFAS 123, “Accounting for Stock-Based Compensation” (“SFAS 123”), and superseded APB Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”)

 

In December 2004, the Financial Accounting Standards Board (the “FASB”), issued SFAS No. 123R, “Share-Based Payment” (“SFAS 123R”), which revised SFAS 123, “Accounting for Stock-Based Compensation” (“SFAS 123”), and superseded APB Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”), and related interpretations. SFAS 123R requires the grant-date fair value of all share-based payment awards that are expected to vest, including employee share options, to be recognized as employee compensation expense over the requisite service period. We adopted SFAS 123R on January 1, 2006 and applied the modified prospective transition method. Under this transition method, we did not restate any prior periods and are recognizing compensation expense for all share-based payment awards that were outstanding, but not yet vested, as of January 1, 2006, based upon the same estimated grant-date fair values and service periods used to prepare our SFAS 123 pro-forma disclosures. We recognize compensation expense for options granted to non-employees in accordance with the provisions of SFAS 123R and the Emerging Issues Task Force consensus Issue 96-18. “Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services.” For additional information about stock-based compensation and the pro-forma effect of recording our share-based compensation plans under the fair value method of SFAS 123, refer to Note 9.