This is Fred's answer:

As a publicly traded company, we prepare our financial statements in accordance with Generally Accepted Accounting Principles, or GAAP. As such we are required to comply with authoritative accounting pronouncements such as FASB Statement No. 123R, Accounting for Stock-Based Compensation. This Statement requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost will be recognized over the period during which an employee is required to provide service in exchange for the award. Feel free to peruse the entire standard at the link below."