Citrix 2000 Annual Report Download - page 52

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CITRIX SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS −− (CONTINUED)
those plans consistent with the method of SFAS No. 123, the Company's net income
and earnings per share would have been reduced to the pro forma amounts
indicated below:
2000 1999 1998
−−−−−−−− −−−−−−−− −−−−−−−
(IN THOUSANDS, EXCEPT
PER SHARE INFORMATION)
Net income (loss)
As reported....................................... $ 94,512 $116,944 $61,102
======== ======== =======
Pro forma......................................... $(38,036) $ 64,069 $39,286
======== ======== =======
Basic earnings (loss) per share
As reported....................................... $ 0.51 $ 0.66 $ 0.36
======== ======== =======
Pro forma......................................... $ (0.21) $ 0.36 $ 0.23
======== ======== =======
Diluted earnings (loss) per share
As reported....................................... $ 0.47 $ 0.61 $ 0.33
======== ======== =======
Pro forma......................................... $ (0.19) $ 0.33 $ 0.22
======== ======== =======
For purposes of the proforma calculations, the fair value of each option is
estimated on the date of the grant using the Black−Scholes option−pricing model
with the following assumptions used:
2000 GRANTS 1999 GRANTS 1998 GRANTS
−−−−−−−−−−− −−−−−−−−−−− −−−−−−−−−−−
Dividend yield.................................. none none none
Expected volatility factor...................... 0.8 0.6 0.6
Approximate risk free interest rate............. 6.0% 5.5% 5.5%
Expected lives.................................. 4.64 years 4.50 years 4.89 years
The determination of the fair value of all options is based on the
assumptions described in the preceding paragraph, and because additional option
grants are expected to be made each year, the above pro forma disclosures are
not representative of pro forma effects on reported net income or loss for
future years.
Fixed Stock Option Plans
The Company's 1995 Stock Plan (the 1995 Plan) was adopted by the Board on
September 28, 1995 and approved by the Company's stockholders in October 1995.
Under the terms of the 1995 Plan the Company is authorized to grant incentive
stock options (ISOs) and nonqualified stock options (NSOs), make stock awards
and provide the opportunity to purchase stock to employees, directors and
officers and consultants of the Company. The 1995 Plan originally provided for
the issuance of a maximum of 36,000,000 (as adjusted for stock splits) shares of
Common Stock, plus, effective January 1, 1997 and each year thereafter, a number
of shares of Common Stock equal to 5% of the total number of shares of Common
Stock issued and outstanding as of December 31 of the preceding year. An
amendment to the 1995 Plan to increase the authorized shares from 69,945,623 to
80,000,000 was proposed to the stockholders in connection with the stockholders'
annual meeting in May 2000. The amendment did not receive enough votes to pass
at the May 2000 meeting and, due to confusion among the Company's stockholders
resulting from inaccurate information published by a third party, the meeting
was adjourned without closing the polls on the amendment. The meeting was
reconvened on June 2, 2000 and the amendment passed. In July 2000, the 1995 Plan
was further amended by the Board of Directors to remove the ability under the
1995 Plan to re−price options. In September 2000, a lawsuit was filed
challenging the validity of stockholders' approval to the amendment of the 1995
Plan. In December 2000, the Delaware Court of Chancery issued an opinion, in a
case unrelated to the Company, which represented a significant development in
the law concerning the obligations of a company when it adjourns its annual
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