This excerpt taken from the NOVL 10-K filed May 25, 2007.
Fiscal 2005 and 2004 Stock Award Information
For fiscal 2005 and 2004, had we accounted for all employee stock-based compensation based on the fair value method as prescribed by SFAS No. 123, our net income and net income (loss) per share would have been the following pro forma amounts:
For the purpose of the above table, the fair value of each option grant is estimated as of the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants in fiscal 2005 and 2004: a risk-free interest rate of approximately 3.8% for fiscal 2005 and 2.8% for fiscal 2004; a dividend yield of 0.0% for both years; a weighted-average expected life of 4.4 years for fiscal 2005 and 3.75 years for fiscal 2004; and a volatility factor of the expected market price of our common stock of 0.55 for fiscal 2005 and 0.77 for fiscal 2004. The weighted-average fair value of options granted in fiscal 2005 and 2004 was $3.17 and $5.63, respectively.