Plantronics 2002 Annual Report Download - page 50

F air Value Disclosures. All options in fiscal 2000, 2001 and 2002 were granted at an
exercise price equal to the market value of Plantronics’ Common Stock at the date of grant.
T he fair value of options at date of grant was estimated using the Black-Scholes model.
T he following assumptions were used and weighted-average fair values resulted:
St ock Op t i o n Plans Emp lo yee St o ck Purchase Plan
Fi scal Year Ende d M arc h 3 1, Fiscal Year En d ed M ar ch 3 1 ,
2000 2001 2002 2000 2001 2002
Expected dividend 0 % 0 % 0% 0 % 0 % 0%
Expected life (in years) 6 . 0 6 . 0 6.0 0 . 5 0 . 5 0.5
Expected volatility 4 2 . 0 % 8 6 . 0 % 51.0% 4 2 . 0 % 8 6 . 0 % 59.0%
Risk-free interest rate 5 . 9 % 5 . 5 % 4.5% 6 . 1 % 6 . 1 % 3.3%
Weighted-average fair value $1 0 . 8 9 $ 2 6 . 5 5 $ 10.50 $3 . 8 0 $ 8 . 3 9 $ 4.92
Volatility is a measure of the amount by which a price has fluctuated over an historical
period. T he higher the volatility, the more the returns on the stock can be expected to vary.
T he risk free interest rate is the rate on a U.S. Treasury bill or bond that approximates
the expected life of the option.
Had compensation expense for our stock option and stock purchase plans been determined
based on the methods prescribed by SFAS 123, our net income and net income per share
would have been as follows:
Fiscal Year End ed M arch 3 1 ,
(in th o u sands, excep t earn in gs per shar e ) 2000 2001 2002
Net income:
As reported $6 4 , 5 1 7 $ 7 3 , 5 5 0 $ 36,248
Pro forma $5 6 , 8 7 9 $ 6 1 , 4 2 7 $ 20,749
Diluted net income per share
As reported $1 . 2 2 $ 1 . 3 8 $ 0.74
Pro forma $1 . 0 7 $ 1 . 1 5 $ 0.42
1 1 . A C Q U I S I T I O N
On January 2, 2002, we acquired 100% of the capital stock of privately held Ameriphone, Inc.
(“Ameriphone”) of Garden Grove, CA to strengthen our product line in the hearing-
impaired market for specialized telephones and other equipment. T he results of
Ameriphone’s operations have been included in the consolidated financial statements
since that date. Ameriphone is a leading supplier of amplified telephones and other
solutions to address the needs of individuals with hearing impairment and other special
needs. Ameriphone joined Plantronics’ Walker business group, a leading supplier of
amplified telephones, specialty handsets and communication test equipment, in serving
the special needs market.
T he aggregate purchase price was $10.4 million, net of cash acquired. T he following table
summarizes the estimated fair values of the assets acquired and liabilities assumed at the
date of acquisition. We obtained third-party valuations of inventory, goodwill and intangible
assets from an independent valuation firm.
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