JDSU » Topics » Stock-Based Compensation

This excerpt taken from the JDSU DEF 14A filed Sep 25, 2009.

Stock-Based Compensation

The Company estimates the fair value of equity awards granted using the Black-Scholes-Merton option-pricing formula and a single option award approach. This option-pricing model requires the input of highly subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The expected stock price volatility assumption is determined using a combination of historical and implied volatility of our common stock. The Company believes that using a combination of historical and market-based implied volatility from traded options on JDSU common stock is a better indicator of expected volatility and future stock price trends than relying solely on historical volatility. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. When estimating forfeitures, the Company considers voluntary termination behavior as well as future workforce reduction programs. Estimated forfeiture rates are trued-up to actual forfeiture as the stock-based awards vest. The total fair value of the equity awards, net of forfeiture, is recorded on a straight-line basis (except for performance based Full Value Awards and options with market conditions which are amortized based upon graded vesting method) over the requisite service periods of the awards, which is generally the vesting period.

This excerpt taken from the JDSU DEF 14A filed Sep 26, 2008.

Stock-Based Compensation

The Company estimates the fair value of equity awards granted using the Black-Scholes-Merton option-pricing formula and a single option award approach. This option-pricing model requires the input of highly subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The expected stock price volatility assumption is determined using a combination of historical and implied volatility of our common stock. The Company believes that using a combination of historical and market-based implied

 

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JDS UNIPHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

volatility from traded options on JDSU common stock is a better indicator of expected volatility and future stock price trends than relying solely on historical volatility. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. When estimating forfeitures, the Company considers voluntary termination behavior as well as future workforce reduction programs. Estimated forfeiture rates are trued-up to actual forfeiture as the stock-based awards vest. The total fair value of the equity awards, net of forfeiture, is recorded on a straight-line basis (except for performance based Full Value Awards which are amortized based upon graded vesting method) over the requisite service periods of the awards, which is generally the vesting period.

This excerpt taken from the JDSU 10-K filed Aug 28, 2008.

Stock-Based Compensation

The Company estimates the fair value of equity awards granted using the Black-Scholes-Merton option-pricing formula and a single option award approach. This option-pricing model requires the input of highly subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The expected stock price volatility assumption is determined using a combination of historical and implied volatility of our common stock. The Company believes that using a combination of historical and market-based implied

 

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JDS UNIPHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

volatility from traded options on JDSU common stock is a better indicator of expected volatility and future stock price trends than relying solely on historical volatility. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. When estimating forfeitures, the Company considers voluntary termination behavior as well as future workforce reduction programs. Estimated forfeiture rates are trued-up to actual forfeiture as the stock-based awards vest. The total fair value of the equity awards, net of forfeiture, is recorded on a straight-line basis (except for performance based Full Value Awards which are amortized based upon graded vesting method) over the requisite service periods of the awards, which is generally the vesting period.

This excerpt taken from the JDSU 10-K filed Aug 27, 2008.

Stock-Based Compensation

The Company estimates the fair value of equity awards granted using the Black-Scholes-Merton option-pricing formula and a single option award approach. This option-pricing model requires the input of highly subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The expected stock price volatility assumption is determined using a combination of historical and implied volatility of our common stock. The Company believes that using a combination of historical and market-based implied

 

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JDS UNIPHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

volatility from traded options on JDSU common stock is a better indicator of expected volatility and future stock price trends than relying solely on historical volatility. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. When estimating forfeitures, the Company considers voluntary termination behavior as well as future workforce reduction programs. Estimated forfeiture rates are trued-up to actual forfeiture as the stock-based awards vest. The total fair value of the equity awards, net of forfeiture, is recorded on a straight-line basis (except for performance based Full Value Awards which are amortized based upon graded vesting method) over the requisite service periods of the awards, which is generally the vesting period.

This excerpt taken from the JDSU DEF 14A filed Sep 28, 2007.

Stock-Based Compensation

The Company estimates the fair value of equity awards granted using the Black-Scholes-Merton option-pricing formula and a single option award approach.This option-pricing model requires the input of highly subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The expected stock price volatility assumption is determined using a combination of historical and implied volatility of our common stock. The Company believes that using a combination of historical and market-based implied volatility from traded options on JDSU common stock is a better indicator of expected volatility and future stock price trends than relying solely on historical volatility. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. When estimating forfeitures, the Company considers voluntary termination behavior as well as future workforce reduction programs. Estimated forfeiture rates are trued-up to actual forfeiture as the stock-based awards vest. The total fair value of the equity awards, net of forfeiture, is recorded on a straight-line basis (except for performance based Full Value Awards which are amortized based upon graded vesting method) over the requisite service periods of the awards, which is generally the vesting period.

This excerpt taken from the JDSU 10-K filed Aug 29, 2007.

Stock-Based Compensation

The Company estimates the fair value of equity awards granted using the Black-Scholes-Merton option-pricing formula and a single option award approach.This option-pricing model requires the input of highly subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The expected stock price volatility assumption is determined using a combination of historical and implied volatility of our common stock. The Company believes that using a combination of historical and market-based implied volatility from traded options on JDSU common stock is a better indicator of expected volatility and future stock price trends than relying solely on historical volatility. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. When estimating forfeitures, the Company considers voluntary termination behavior as well as future workforce reduction programs. Estimated forfeiture rates are trued-up to actual forfeiture as the stock-based awards vest. The total fair value of the equity awards, net of forfeiture, is recorded on a straight-line basis (except for performance based Full Value Awards which are amortized based upon graded vesting method) over the requisite service periods of the awards, which is generally the vesting period.

 

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Index to Financial Statements
This excerpt taken from the JDSU DEF 14A filed Sep 29, 2006.
Stock-based Compensation: We estimate the fair value of equity awards granted using the Black-Scholes-Merton option-pricing formula and a single option award approach. This option-pricing model requires the input of highly subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The expected stock price volatility assumption was determined using a combination of historical and implied volatility of our common stock. In addition, we are required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. When estimating forfeitures, we consider voluntary termination behavior as well as future workforce reduction programs. Estimated forfeiture rates are trued-up to actual forfeiture results as the stock-based awards vest the forfeiture rate based on historical experience of our stock-based award that are granted, exercised and cancelled. Total fair value of the equity awards, net of forfeiture, is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period.

     

This excerpt taken from the JDSU 10-K filed Sep 14, 2006.

Stock-Based Compensation:

The Company estimates the fair value of equity awards granted using the Black-Scholes-Merton option-pricing formula and a single option award approach. This option-pricing model requires the input of highly subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The fair value of stock-based payments made through the quarter ended September 30, 2004 were valued using a volatility factor based on the Company’s historical stock prices. Commencing in the quarter ended March 31, 2005 and through the quarter ended June 30, 2005, the Company’s volatility factor was estimated using its traded options. Effective the first quarter of fiscal 2006, the Company re-evaluated the assumptions used to estimate volatility, including whether implied volatility of its traded options appropriately reflects the market’s expectations of future volatility and determined that it would use a combination of the implied volatility of its traded options and historical volatility of its stock price based on the expected term of the equity instrument. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. When estimating forfeitures, the Company considers voluntary termination behavior as well as future workforce reduction programs. Estimated forfeiture rates are trued-up to actual forfeiture results as the stock-based awards vest. Total fair value of the equity awards, net of forfeiture, is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period.

 

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Prior to the adoption of SFAS 123(R), the Company previously applied APB 25 and related Interpretations to account for its stock-based compensation plans. The Company also provided the disclosures required under SFAS 148. The Company generally did not recognize stock-based compensation expense in its statement of operations for periods prior to the adoption of SFAS 123(R) as most options granted had an exercise price equal to the market value of the underlying common stock on the date of grant.

This excerpt taken from the JDSU DEF 14A filed Oct 21, 2005.

Stock-Based Compensation:

 

In accordance with SFAS 148, the Company is required to present pro forma information regarding its net loss and net loss per share as if the Company had accounted for its employee stock options (including shares issued under the employee stock purchase plans, collectively the “options”), granted subsequent to June 30, 1995 using the fair value based method of accounting. The fair value of the options granted in fiscal 2005, 2004, and 2003 has been estimated at the date of grant using the Black-Scholes-Merton option pricing model with the following weighted-average assumptions:

 

     Employee Stock Option Plans

    Employee Stock Purchase Plans

 
     FY 2005

    FY 2004

    FY 2003

    FY 2005

    FY 2004

    FY 2003

 

Expected life (in years)

   4.30     5.00     5.00     0.90     1.25     1.25  

Volatility

   0.54     0.73     0.80     0.53     0.46     0.79  

Risk-free interest rate

   3.77 %   3.00 %   3.07 %   2.02 %   2.10 %   1.69 %

Dividend yield

   0.00 %   0.00 %   0.00 %   0.00 %   0.00 %   0.00 %

 

The Black-Scholes-Merton option pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models such as the Black-Scholes-Merton option pricing model require the input of highly subjective assumptions, including the expected stock price volatility. Because the Company’s options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate.

 

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JDS UNIPHASE CORPORATION

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

The weighted-average fair value of employee stock options granted during fiscal 2005, 2004, and 2003 was $1.67, $2.40, and $1.87 per share, respectively. The weighted-average exercise price of employee stock options granted during fiscal 2005, 2004, and 2003 was $1.65, $3.77, and $2.63 per share, respectively. The weighted-average fair value of shares granted under the employee stock purchase plans during fiscal 2005, 2004, and 2003 was $1.16, $0.85, and $0.88 per share, respectively.

 

This excerpt taken from the JDSU 10-K filed Sep 30, 2005.

Stock-Based Compensation:

 

In accordance with SFAS 148, the Company is required to present pro forma information regarding its net loss and net loss per share as if the Company had accounted for its employee stock options (including shares issued under the employee stock purchase plans, collectively the “options”), granted subsequent to June 30, 1995 using the fair value based method of accounting. The fair value of the options granted in fiscal 2005, 2004, and 2003 has been estimated at the date of grant using the Black-Scholes-Merton option pricing model with the following weighted-average assumptions:

 

     Employee Stock Option Plans

    Employee Stock Purchase Plans

 
     FY 2005

    FY 2004

    FY 2003

    FY 2005

    FY 2004

    FY 2003

 

Expected life (in years)

   4.30     5.00     5.00     0.90     1.25     1.25  

Volatility

   0.54     0.73     0.80     0.53     0.46     0.79  

Risk-free interest rate

   3.77 %   3.00 %   3.07 %   2.02 %   2.10 %   1.69 %

Dividend yield

   0.00 %   0.00 %   0.00 %   0.00 %   0.00 %   0.00 %

 

The Black-Scholes-Merton option pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models such as the Black-Scholes-Merton option pricing model require the input of highly subjective assumptions, including the expected stock price volatility. Because the Company’s options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate.

 

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JDS UNIPHASE CORPORATION

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

The weighted-average fair value of employee stock options granted during fiscal 2005, 2004, and 2003 was $1.67, $2.40, and $1.87 per share, respectively. The weighted-average exercise price of employee stock options granted during fiscal 2005, 2004, and 2003 was $1.65, $3.77, and $2.63 per share, respectively. The weighted-average fair value of shares granted under the employee stock purchase plans during fiscal 2005, 2004, and 2003 was $1.16, $0.85, and $0.88 per share, respectively.

 

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