Adaptec 2006 Annual Report Download - page 76

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Table of Contents
(in thousands, except per share amounts)
December 31,
2005
December 26,
2004
Net (loss) income, as reported $ 27,986 $ 51,681
Adjustments (Restated - see Note 2):
Stock-based employee compensation expense included in net income 215 697
Additional stock-based employee compensation expense under fair value based method for all awards, net of
related tax effects (47,531) (60,683)
Net loss, adjusted $ (19,330) $ (8,305)
Basic net income per share, as reported $ 0.15 $ 0.29
Basic net loss per share, adjusted $ (0.10) $ (0.05)
Diluted net income per share, as reported $ 0.15 $ 0.27
Diluted net loss per share, adjusted $ (0.10) $ (0.05)
On October 28, 2005, the Board of Directors of the Company approved an acceleration of vesting of the Company’s stock options granted on December 29, 2003
to employees and executive officers under the Company’s 1994 Incentive Stock Plan and its 2001 Stock Option Plan that have an exercise price per share of
$20.13 (the “Acceleration”). As a result of the Acceleration, options to purchase approximately 2.4 million shares of the Company’s common stock became
immediately exercisable, of which options to purchase 0.8 million shares were held by executive officers. As these options had exercise prices in excess of the
current market value of the Company’s common stock, based on the closing price of $6.34 per share on October 28, 2005, and were not fully achieving their
original objectives of incentive compensation and employee retention, the Company expects the acceleration to have a positive effect on employee morale,
retention and perception of option value. In addition, the accelerated vesting eliminates future compensation expense the Company would otherwise recognize in
its statement of operations with respect to these accelerated options upon the adoption of Statement of Financial Accounting Standards No. 123 (revised 2004),
“Share-Based Payment” (SFAS 123R).
See Note 5 to the Consolidated Financial Statements for further information on stock-based compensation.
Interest income, net. The components of interest income, net are as follows:
(in thousands)
December 31,
2006
December 31,
2005
December 26,
2004
Interest income $ 13,942 $ 13,502 $ 7,925
Interest expense on long-term debt (4,963) (1,396) (3,066)
$ 8,979 $ 12,106 $ 4,859
Income taxes. Income taxes are reported under Statement of Financial Accounting Standards No. 109 and, accordingly, deferred income taxes are recognized
using the asset and liability method, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carry forwards.
Valuation allowances are provided if, after considering available evidence, it is more likely than not that some or all of the deferred tax assets will not be
realized.
74
Source: PMC SIERRA INC, 10-K, March 01, 2007 Powered by Morningstar® Document Research℠