texb: Based om my calculation, I believe you may be over stating the amounts. My calculation of Cycle 1 expenses are based on the following information contained in identical statements in the second and third quarter 10-Qs.
"We issued approximately 370,000 restricted stock units under the program in second quarter 2004 with a value of approximately $6.5 million on the date of the grant. We recognized approximately $0.9 million and $1.4 million of compensation expense related to our accrual for the cash-based incentive and amortization of the restricted stock units, respectively,"
Thus they are apparently recognizing expense of $2.3 mil per qtr, or $6.9 mil for the three quarters of 2004. This is in basic agreement with the $7 mil IDCC estimated and that you show. The $6.9 Mil consisting of $2.7 mil for cash and $4.2 mil for RSUs. However, as stated the total value of the RSUs issued was $6.5 Mil. Therefore the remaining expense to be amortized in 2005 would only be $2.3 Mil ($6.5 - $4.2). Thus it would appear that for some reason they are not amortizing the expense evenly over the 18 month cycle period. Assuming the same rate of accruing is being done for the cash portion would result in a 2005 charge of $1.5 Mil, for a total 2005 expense of $3.8 Mil, rather than your expense of 9.3 Mil. This would give a total cycle 1 program cost of $10. 7 mil ($6.9 + $3.8).
The foregoing would change your calculation for Cycle 2. In addition, Cycle 2 is based on a 3 year vesting (amortization) period rather than the 18 months (?) used for cycle 1, therefore the yearly expense charge would smaller.
A bit confusing with some conjecturing, but as Ron has stated when the 10-K and proxy statements come out we should have better information.
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