Plantronics 2008 Annual Report Download - page 80

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74
Stock-Based Compensation
The following table summarizes the amount of stock-based compensation expense recorded under SFAS No. 123(R), included in the
consolidated statements of operations:
(in thousands, except per share data) 2007 2008
Cost of revenues $ 2,908 $ 2,474
Research, develo
p
ment and en
g
ineerin
g
3,835 3,552
Sellin
g
,
g
eneral and administrative 10,176 9,966
Stock-based compensation expense included in
operating expenses 14,011 13,518
Total stock-based com
p
ensatio
n
16,919 15,992
Income tax benefi
t
(5,599) (5,173)
Total stock-based compensation expense, net of tax $ 11,320 $ 10,819
Decrease in basic and diluted earnin
g
s
p
er share $0.24 $ 0.22
Fiscal Year Ended March 31,
As of March 31, 2008, total unrecognized compensation cost related to unvested stock options was $18.2 million which is expected to
be recognized over a weighted average period of 2.3 years. Total unrecognized compensation cost related to non-vested restricted
stock awards was $6.9 million as of March 31, 2008 which is expected to be recognized over a weighted average period of 3.1 years
and there was $0.5 million of unrecognized compensation cost related to the ESPP as of March 31, 2008 that is expected to be fully
recognized during the next two fiscal quarters. As a result of adopting SFAS No. 123(R) on April 2, 2006, our basic and diluted net
income per share for fiscal 2007 was $0.24 lower than had we continued to account for stock-based compensation under APB No. 25.
Prior to the adoption of SFAS 123(R), the Company used the intrinsic value method as prescribed in APB 25, to account for all stock-
based employee compensation plans and had adopted the disclosure-only alternative of SFAS No. 123, as amended by SFAS No. 148,
“Accounting for Stock-Based Compensation – Transition and Disclosure” (“SFAS No. 148”). Consistent with the disclosure
provisions of SFAS No. 148, the pro forma information for the year ended March 31, 2006 had the Company applied the fair value
recognition provisions under SFAS 123 to account for stock-based awards was as follows:
Fiscal Year Ended
(in thousands, except per share data) March 31, 2006
Net income - as reported $ 81,150
Add stock-based employee compensation expense
included in net income, net of tax 748
Less stock-based compensation expense determined under
fair value-based method, net of tax (11,967)
Net income - pro forma $69,931
Basic net income per share - as reported $ 1.72
Basic net income per share - pro forma $ 1.48
Diluted net income per share - as reported $ 1.66
Diluted net income per share - pro forma $ 1.43
Valuation Assumptions
The Company estimates the fair value of stock options and ESPP shares using a Black-Scholes option valuation model. The fair value
of each option grant is estimated on the date of grant using the straight-line attribution approach with the following weighted average