Plantronics 1999 Annual Report Download - page 24

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page 22 PLANTRONICS ANNUAL REPORT 1999
Notes to consolidated financial statements
FAIR VALUE DISCLOSURES
All options in fiscal 1997, 1998 and 1999 were granted at an exercise price equal to the fair market value
of the Company’s Common Stock at the date of grant.The weighted average fair value at date of grant
for options granted during 1997, 1998 and 1999 were $6.34, $9.79 and $25.25 per share, respectively. The
fair value of options at date of grant was estimated using the Black-Scholes model with the following
assumptions for 1997: dividend yield of 0%, an expected life of 5 years, expected volatility of 17% and risk
free interest rate of 6.6%. For 1998 the assumptions were: dividend yield of 0%, an expected life of 5 years,
expected volatility of 28% and risk free interest rate of 5.6%. For 1999 the assumptions were: dividend yield
of 0%, an expected life of 5.6 years, expected volatility of 39% and risk free interest rate of 5.3%.
Volatility is a measure of the amount by which a price has fluctuated over a historical period.The higher
the volatility, the more the returns on the stock can be expected to vary. The risk free interest rate is the
rate on a US Treasury bill or bond that approximates the expected life of the option.
Had compensation expense for the Company’s stock-based compensation plans been determined based on
the methods prescribed by SFAS No. 123, the Company’s net income and net income per share would
have been as follows:
FISCAL YEAR ENDED MARCH 31,
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 199 7 199 8 1999
Net income:
As reported $29,671 $39,189 $54,204
Pro forma $29,044 $37,381 $51,771
Net income per share:
As reported $ 1.67 $ 2.15 $ 2.96
Pro forma $ 1.63 $ 2.05 $ 2.83