Blackberry 2000 Annual Report Download - page 34

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(e) Accounting for stock compensation – Under U.S. GAAP, for any stock option with an exercise price that is less than the
market price on the date of grant, the difference between the exercise price and the market price on the date of grant is
recorded as compensation expense (“intrinsic value based method”). The Company grants stock options at the fair market
value of the shares on the day preceding the date of the grant of the options. Consequently, no compensation expense is
recognized. This method is consistent with U.S. GAAP, APB Opinion 25, Accounting for Stock Issued to Employees.
SFAS No. 123, Accounting for Stock-Based Compensation, requires proforma disclosures of net income and earnings per
share, as if the fair value based method as opposed to the intrinsic value based method of accounting for employee stock
options had been applied. The disclosures in the following table show the company’s net income and earnings per share
on a proforma basis using the fair value method as determined by using the Black-Scholes option pricing model include:
February 29, February 28, February 28,
For the year ended 2000 1999 1998
Net income under U.S. GAAP $ 10,170 $ 6,723 $ 387
Estimated stock-based compensation costs 3,261 1,656 490
Proforma net income (loss) $ 6,909 $ 5,067 $ (103)
Proforma net income (loss) per common share
Basic $ 0.10 $ 0.08 $ 0.00
Diluted $ 0.09 $ 0.08 $ 0.00
Weighted average number of shares
Basic 66,613 64,148 52,944
Diluted 72,996 66,855 54,317
The weighted average fair value of options granted during the following periods were calculated as follows using the
Black-Scholes option pricing model with the following assumptions:
February 29, February 28, February 28,
For the year ended 2000 1999 1998
Weighted average
Black-Scholes value of options $ 10.77 $ 1.92 $ 1.17
Assumptions:
Risk free interest rates 4 – 5% 4 – 5% 5 – 6.5%
Expected life in years 3.5 45
Expected dividend yield 0% 0% 0%
Volatility 60 – 90% 50% 35%
32
Notes to the Consolidated Financial Statements continued ■For the years ended February 29, 2000, February 28, 1999 and February 28, 1998