T YR AT ECH, INC. / ANNUAL R EPORT 20 0 9
Notes to Consolidated Financial Statements
(CONTINUED)
data for the Company's common stock becomes available. The risk-free interest rate assumption is based on the U.S. Treasury instruments at grant date whose term was consistent with the expected term of the Company's SARs. The expected dividend assumption is based on the Company's history and expectation of dividend payouts.
2009
2008
Valuation assumptions
Expected dividend yield
0
%
0
%
Expected volatility
82% - 86
%
78% - 83
%
Expected term (years)
5.5 - 7
7
Risk-free interest rate
2.1% - 3.2
%
2.4% - 4.3
%
SAR activity during the period indicated as follows:
Number of Shares
Weighted Average Exercise Price
Weighted Average Remaining Contractual Term
Aggregate Intrinsic Value
Weighted Average Grant-Date Fair Value
Balance at December 31, 2007
777,000
$ 9.74
$ 9.70
$141,760
$ 8.48
Granted
415,000
6.74
5.06
Exercised
-
-
-
Expired
(129,250
)
9.73
7.47
Forfeited
(387,750
)
9.73
7.44
Balance at December 31, 2008
675,000
$ 7.90
$ 9.20
$ 0
$ 6.04
Granted
753,384
0.39
0.27
Exercised
-
-
-
Expired
-
-
-
Forfeited
(496,324
)
6.53
4.94
Balance at December 31, 2009
932,060
$5.44
$8.99
$ 0
$4.19
Exercisable at December 31, 2008
65,000
$ 9.75
$ 7.97
$ 0
Exercisable at December 31, 2009
111,250
$9.51
$8.01
$ 0
The weighted average grant date fair value of SARs granted during the year ended December 31, 2009 was US$0.1 million (2008: US$7.6 million). During the year 75,000 (2008: 65,000) SARs vested and none were exercised (2008: none) with a fair value of US$0.5 million (2008: $1.4 million). The SARs issued through December 31, 2009 have a maximum contract term of ten years.
As of December 31, 2009, there was US$1.5 million (2008: US$3.2 million) of total unrecognized compensation cost related to non-vested SAR arrangements granted under the plan. That cost is expected to be recognized over a weighted average period of 2.2 years. The total fair value of shares vested during the year was US$0.5 million (2008: US$1.4 million). The compensation recognized in operating expenses for SARs for the year ended December 31, 2009 was US$1.1 million (2008: US$1.3 million).
The Company plans to use authorized and un-issued shares to satisfy SAR exercises.
Restricted Stock Grant
During the period from May 23, 2007 to December 31, 2007, the Company granted 50,000 shares of restricted stock to one employee of the Company at zero cost at the date of grant, which required the Company to issue common stock to the employee upon exercise of the restricted stock grant. 50% vested and became fully exercisable after one year and the balance after two years from the date of grant.
The fair value of these grants was determined by the Company at the grant date and was equal to the fair market value of the common stock at the date of grant. The fair value is amortised to compensation expense on a straight line basis over the vesting period.
Restricted stock grant activity during the period indicated as follows:
