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Table of Contents
options on the Company's common stock. The expected life of stock options granted prior to December 31, 2007 was based on the simplified calculation of
expected life as defined by Staff Accounting Bulletin (SAB) 107, "Share Based Payments". The expected life of stock options granted after January 1, 2008 is
based on historical employee exercise patterns associated with prior similar option grants. The interest rate is based on the average of the U.S. Treasury yield
curve on investments with terns approximating the expected life during the fiscal quarter an option is granted.
The assumptions used for the twelve months ended January 31, 2008, 2007, and 2006, respectively, and the resulting estimates of weighted-average fair
value per share of options and ESPP shares granted during those periods are as follows:
ESPP Stock Options
Fiscal Year Ended January 31,
2008 2007 2006 2008 2007 2006
Expected life (in years) 0.43 0.57 0.40 6.26 6.25 4.00
Volatility 56% 55% 62% 68% 81% 61%
Average risk free interest rate 4.23% 4.96% 3.54% 4.60% 4.81% 3.85%
Dividend Yield 0% 0% 0% 0% 0% 0%
Weighted-average fair value during the period $ 2.66 $ 1.95 $ 2.03 $ 4.08 $ 4.96 $ 2.38
Prior to the adoption of SFAS 123R, the Company presented deferred compensation as a separate component of stockholder' equity. In accordance with
the provisions of SFAS 123R, on February 1, 2006, the Company reclassified the balance in deferred compensation to additional paid-in capital on the
consolidated balance sheet.
15. INCOME TAXES
Income tax provision was $30,000, $52,000, and $64,000 in fiscal years 2008, 2007, and 2006, respectively, due to state income taxes and foreign
withholding taxes paid in Korea and Japan. The income tax expense differed from the amounts computed by applying the U.S. federal income tax rate of 35%
to pretax loss as a result of the following:
Fiscal Year Ended January 31,
2008 2007 2006
(In thousands)
Federal statutory rate $ (11,010) $ (16,696) $ (12,927)
State taxes 29 41 38
Foreign withholding tax 1 11 26
Net operating loss and temporary differences for which no tax benefit was realized 6,570 13,540 12,766
Stock-Based compensation 4,260 3,074 —
Non-deductible expense and other 180 82 161
Total tax expense $ 30 $ 52 $ 64
82