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EQR » Topics » Share options for the year ended December 31, 2003 included $1.4 million of expense recognition related to options granted in the first quarter of 2003 to the Companys former chief executive officer. These options vested immediately upon grant.

This excerpt taken from the EQR 8-K filed Dec 2, 2005.
Share options for the year ended December 31, 2003 included $1.4 million of expense recognition related to options granted in the first quarter of 2003 to the Company’s former chief executive officer.  These options vested immediately upon grant.

 

The fair value of the option grants as computed under SFAS No. 123 would be recognized over the vesting period of the options.  The fair value for the Company’s share options was estimated at the time the share options were granted using the Black Scholes option pricing model with the following weighted-average assumptions:

 

 

 

2004

 

2003

 

2002

 

Risk-free interest rate

 

3.03

%

3.02

%

4.55

%

Expected dividend yield

 

6.52

%

6.46

%

6.46

%

Volatility

 

20.0

%

20.8

%

20.8

%

Expected life of the options

 

5 years

 

5 years

 

7 years

 

Fair value of options granted

 

$

2.26

 

$

1.90

 

$

2.69

 

 

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable.  In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s share options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its share options.

 

F-16


 

This excerpt taken from the EQR 8-K filed Aug 22, 2005.
Share options for the year ended December 31, 2003 included $1.4 million of expense recognition related to options granted in the first quarter of 2003 to the Company’s former chief executive officer.  These options vested immediately upon grant.

 

The fair value of the option grants as computed under SFAS No. 123 would be recognized over the vesting period of the options.  The fair value for the Company’s share options was estimated at the time the share options were granted using the Black Scholes option pricing model with the following weighted-average assumptions:

 

 

 

2004

 

2003

 

2002

 

Risk-free interest rate

 

3.03

%

3.02

%

4.55

%

Expected dividend yield

 

6.52

%

6.46

%

6.46

%

Volatility

 

20.0

%

20.8

%

20.8

%

Expected life of the options

 

5 years

 

5 years

 

7 years

 

Fair value of options granted

 

$

2.26

 

$

1.90

 

$

2.69

 

 

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable.  In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s share options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its share options.

 

F-16


 

EXCERPTS ON THIS PAGE:

8-K
Dec 2, 2005
8-K
Aug 22, 2005

RELATED TOPICS for EQR:

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