These excerpts taken from the NYFX 10-K filed Mar 16, 2009.
The increase in stock-based compensation included in SG&A in 2008 and 2007 was primarily due to grants of stock options and restricted stock units covering 9.9 million shares made in October 2007 following the adoption of the 2007 Omnibus Equity Compensation Plan. These grants were intended to be an up-front, multi-year program designed to assist in retention and to further promote alignment of employee interests with those of our stockholders. In 2009, stock-based compensation expense for currently outstanding awards is expected to be $1.5 million per quarter. Stock-based compensation amounts may vary, however, depending on the level of future grants, the fair value of performance awards when the applicable criteria are established and whether such performance awards actually vest.
We adopted SFAS No. 123 (revised 2004), Share-Based Payment (SFAS 123(R)), on January 1, 2006 using the modified-prospective-transition method. Under the fair value recognition provisions of SFAS 123(R), stock based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the vesting period. Determining the fair value of share-based awards at the grant date requires assumptions and judgments about expected volatility and forfeiture rates, among other factors. If actual results differ significantly from these estimates, our results of operations could be materially impacted.
With respect to certain awards, we have been confronted with various situations under which the required factual documentation necessary to determine measurement criteria was either inconsistent, incomplete or could not be located, and other situations relating to the validity and/or authorization of the grant. In these situations, our treatment is consistent with the SEC Staff guidance to industry dated September 19, 2006.
For instances where there are issues as to validity and/or authorization of grants, we have accounted for such awards as fixed options using as the measurement date the date that we have determined to be the date on which the terms and recipients were established with finality.
For instances where we have difficulty locating documentation to determine precisely the first date on which both the number of shares and exercise prices were known, we have determined measurement dates based upon the documentation available as to when the grants were included in our books and records or using assumptions based on the historical documentation on other grants with similar characteristics. These determinations require significant judgments.
The Company adopted the fair value recognition provisions of SFAS No. 123 (revised 2004), Share-Based Payment (SFAS 123(R)) on January 1, 2006. SFAS 123(R) establishes standards for the accounting for transactions in which an entity exchanges its equity for goods or services; addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entitys equity instruments or that may be settled by the issuance of those equity instruments; and
This excerpt taken from the NYFX 8-K filed Mar 8, 2007.
Stock-Based Compensation: These errors were primarily associated with post-grant modifications of options, including extensions, accelerations, re-pricings and increases in shares, exercises of options and warrants using non-recourse notes and incorrect determinations of measurement dates and resulting determinations of intrinsic values of stock option awards. When combined with the $16.7 million non-cash stock-based compensation restatement adjustment recorded in the 2004 Form 10-K, the total amount of non-cash stock-based compensation recorded by the Company through 2004 is $55.1 million.
This excerpt taken from the NYFX 10-K filed Mar 7, 2007.
In November 2005, under the oversight of the Subcommittee, the Company commenced an extensive document review related to its historical stock option practices in connection with the SECs investigation into those practices. This document review was a necessary step in completing managements review of the Companys historical stock-based compensation awards, which was conducted under the oversight of the Audit Committee, and the Subcommittee. In February 2006, Mr. Vigliotti assumed management oversight of the internal review. The 2005 Restatement is based on this internal review, the scope and findings of which are summarized below.