pab bankshares, inc. - SNL Financial

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 19.
STOCK PLANS AND STOCK-BASED EMPLOYEE COMPENSATION (Continued)
A further summary of the options outstanding at December 31, 2009 follows.
Options Outstanding
Options Exercisable
Range of
Exercise
Prices Number
Weighted-
Average
Contractual
Life in Years
Weighted-
Average
Exercise
Price
Number
Weighted-
Average
Exercise
Price
$ .00 - 2.26 128,100 6.87 $ 1.98 - $ -
2.27 - 4.53 265,200 7.23 3.00 - -
4.54 - 6.80 24,000 9.00 4.90 4,000
4.90
6.81 - 9.06 72,823 3.21 7.76 67,687 7.70
9.07 - 11.33 115,575 1.52 9.92 115,575 9.92
11.34 - 13.60 137,037 5.35 13.04 82,835 13.02
13.61 - 15.87 56,100 4.81 14.22 48,144 14.29
15.88 - 18.13 1,529 5.93 17.51 1,223 17.51
18.14 - 20.40 26,520 6.01 18.14 19,176 18.14
20.41 - 22.67
85,679 6.99 21.01 48,755 20.93
912,563 5.69 $ 8.52 387,395 $ 12.51
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with
the assumptions listed in the table below. Expected volatilities are based on historical volatility of the Company’s
stock. Expected dividends are based on dividend trends and the market price of the Company’s stock price at grant.
Historical data is used to estimate option exercises and employee terminations within the valuation model. The riskfree
rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the
time of grant.
2009 2008 2007
Risk-free interest rate 2.02% - 2.98% 2.77% - 4.03% 4.39% - 4.68%
Expected life of the options
7 - 10 years 7 - 10 years 7 - 10 years
Expected dividends (as a percent
of the fair value of the stock) 0.00% 0.00% - 4.66% 2.63% - 3.50%
Weighted average expected dividends (as a
percent of the fair value of the stock) 0.00% 4.12%
3.20%
Expected volatility 34.02% - 62.18% 25.83% - 32.53% 26.62% - 31.62%
Weighted-average expected volatility
54.12% 28.96% 28.23%
NOTE 20.
STOCK WARRANTS
On September 9, 2009, the Company announced that it completed a private placement of approximately $13,412,000 of
additional capital that will be used to support the operations of the Company’s wholly owned banking subsidiary. The
private placement included $8,305,000 of the Company’s “Series A Contingent Convertible Perpetual Non-cumulative
Preferred Stock,” no par value per share (the “Series A Preferred Stock”) that had been held in escrow since March 5,
2009, along with an additional $5,107,000 of the Company’s “Series B Contingent Convertible Perpetual Non-cumulative
Preferred Stock,” no par value per share (the “Series B Preferred Stock”). The Series A Preferred Stock and the Series B
Preferred Stock was converted into shares of the Company’s no par value per share common stock (the “Common Stock”),
and the holders received warrants to purchase shares of Common Stock equal to 30% of the aggregate value of the Series
B Preferred Stock. At December 31, 2009, there were 1,072,960 warrants outstanding with an exercise price of $3.75.
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