Citrix 2007 Annual Report Download - page 99

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CITRIX SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Under the 2005 ESPP, all full-time and certain part-time employees of the Company are eligible to purchase
common stock of the Company twice per year at the end of a six month payment period (a “Payment Period”).
During each Payment Period, eligible employees who so elect may authorize payroll deductions in an amount no
less than 1% nor greater than 10% of his or her base pay for each payroll period in the Payment Period. At the
end of each Payment Period, the accumulated deductions are used to purchase shares of common stock from the
Company up to a maximum of 12,000 shares for any one employee during a Payment Period. Shares are
purchased at a price equal to 85% of the fair market value of the Company’s common stock on the last business
day of a Payment Period. Employees who, after exercising their rights to purchase shares of common stock under
the 2005 ESPP, would own shares of 5% or more of the voting power of the Company’s common stock, are
ineligible to participate under the 2005 ESPP. The 2005 ESPP provides for the issuance of a maximum of
10,000,000 shares of common stock. As of December 31, 2007, 537,091 shares had been issued under the 2005
ESPP. The Company recorded stock-based compensation costs related to the 2005 ESPP of $0.8 million and $1.8
million for the years ended December 31, 2007 and 2006, respectively.
Pro Forma Information Under SFAS No. 123 for Periods Prior to January 1, 2006
The following table illustrates the effect on net earnings and earnings per share if the Company had applied
the fair value recognition provisions of SFAS No. 123 to stock-based awards in 2005 (in thousands, except per
share information):
2005
Net income:
As reported ........................................... $165,609
Add: Total stock-based employee compensation included in net
income as reported, net of related tax effects ............... 5,767
Deduct: Total stock-based employee compensation expense
determined under fair value based method for all awards, net
of related tax effects .................................. (38,475)
Pro forma ............................................ $132,901
Basic earnings per share:
As reported ........................................... $ 0.96
Pro forma ............................................ $ 0.77
Diluted earnings per share:
As reported ........................................... $ 0.93
Pro forma ............................................ $ 0.75
For purposes of the pro forma calculations, the fair value of each option was estimated on the date of the
grant using the Black-Scholes option-pricing model, assuming no expected dividends, and the following
assumptions:
Stock Options granted during
2005
Expected volatility factor ............... 0.31 - 0.35
Approximate risk free interest rate ........ 3.7% - 4.4%
Expected term (in years) ................ 3.32
F-25