SCMR » Topics » 4. Stock-Based Compensation

This excerpt taken from the SCMR 10-K filed Jun 21, 2007.

Stock-Based Compensation

Effective August 1, 2005, the Company adopted the provisions of Statement of Financial Accounting Standards No. 123R, (“SFAS 123R”) “Share-Based Payment,” which establishes accounting for equity instruments exchanged for employee services. Under the provisions of SFAS No. 123R, share-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity grant). Prior to August 1, 2005, the Company accounted for share-based compensation to employees in accordance with Accounting Principles Board Opinion (“APB”) No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. The Company also followed the disclosure requirements of SFAS No. 123, “Accounting for Stock-Based Compensation”, as amended by SFAS 148, “Accounting for Stock-Based Compensation—Transition and Disclosure”. The Company elected to adopt the modified prospective transition method as provided by SFAS No. 123R and, accordingly, financial statement amounts for the prior periods presented in this Form 10-K have not been restated to reflect the fair value method of expensing share-based compensation.

SFAS 123R requires companies to estimate the fair value of share-based awards on the date of grant using an option-pricing model. The value of awards that are ultimately expected to vest is recognized as expense over the requisite service periods, or in the period of grant if the requisite service period has been provided, in the Company’s Consolidated Statement of Operations. The Company uses the Black-Scholes option pricing model to determine the fair value of stock options under SFAS 123R, consistent with that used for pro forma disclosures under SFAS 123. The fair value of a restricted stock unit is equivalent to the market price of the Company’s common stock on the grant date.

Stock-based compensation expense recognized in the Company’s consolidated statement of operations for the year ended July 31, 2006 included (i) compensation expense for share-based awards granted prior to, but not yet vested as of July 31, 2005 based on the grant date fair value estimated in accordance with the provisions of SFAS 123 and (ii) compensation expense for the share-based awards granted subsequent to July 31, 2005 based on the grant date fair value estimated in accordance with the provisions of SFAS 123R. Compensation expense for all share-based awards that were granted on or prior to July 31, 2005 will continue to be recognized using the straight-line option method. SFAS 123R requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. In the Company’s stock-based compensation expense required under APB 25 and the pro forma information required under SFAS 123 for the periods prior to 2006, the Company accounted for forfeitures as they occurred.

This excerpt taken from the SCMR 10-Q filed Sep 19, 2005.

4. Stock-Based Compensation

 

The Company accounts for stock-based employee compensation arrangements in accordance with the intrinsic value provisions of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and related interpretations and complies with the disclosure provisions of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation,” (“SFAS 123”), as amended by SFAS No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure”.

 

Under the intrinsic value method, when the exercise price of the Company’s employee stock awards equals the market price of the underlying stock on the date of grant, no compensation expense is recognized in the Company’s Consolidated Statements of Operations. The Company currently recognizes compensation expense under APB 25 relating to certain stock options with exercise prices below fair market value on the date of grant and restricted stock.

 

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The Company is required under SFAS 123 to disclose pro forma information regarding the stock awards made to its employees based on specified valuation techniques that produce estimated compensation charges. The pro forma information is as follows (in thousands, except per share data):

 

     Three Months Ended

    Nine Months Ended

 
    

April 30,

2005


   

April 24,

2004


   

April 30,

2005


   

April 24,

2004


 
           (as restated)           (as restated)  

Net loss:

                                

As reported

   $ (11,980 )   $ (10,561 )   $ (25,225 )   $ (35,684 )

Stock-based compensation expense included in reported net loss under APB 25

     339       1,246       1,395       4,623  

Stock-based compensation expense that would have been included in reported net loss if the fair value provisions of FAS 123 had been applied to all awards

     (6,036 )     (32,233 )     (52,595 )     (99,083 )
    


 


 


 


Pro forma

   $ (17,677 )   $ (41,548 )   $ (76,425 )   $ (130,144 )
    


 


 


 


Basic and diluted net loss per share:

                                

As reported

   $ (0.04 )   $ (0.04 )   $ (0.09 )   $ (0.13 )

Pro forma

   $ (0.06 )   $ (0.15 )   $ (0.28 )   $ (0.48 )

 

The above pro forma disclosures are not necessarily representative of the effects on reported net income or loss for future periods. The fair value of the stock options at the date of grant was estimated using the Black-Scholes model.

 

This excerpt taken from the SCMR 10-Q filed Sep 12, 2005.

4. Stock-Based Compensation

 

The Company accounts for stock-based employee compensation arrangements in accordance with the intrinsic value provisions of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and related interpretations and complies with the disclosure provisions of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation,” (“SFAS 123”), as amended by SFAS No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure”.

 

Under the intrinsic value method, when the exercise price of the Company’s employee stock awards equals the market price of the underlying stock on the date of grant, no compensation expense is recognized in the Company’s Consolidated Statements of Operations. The Company currently recognizes compensation expense under APB 25 relating to certain stock options with exercise prices below fair market value on the date of grant and restricted stock.

 

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The Company is required under SFAS 123 to disclose pro forma information regarding the stock awards made to its employees based on specified valuation techniques that produce estimated compensation charges. The pro forma information is as follows (in thousands, except per share data):

 

     Three Months Ended

 
    

October 30,

2004


   

October 25,

2003


 
     (as restated)     (as restated)  

Net loss:

                

As reported

   $ (7,863 )   $ (12,151 )

Stock-based compensation expense included in reported net loss under APB 25

     672       1,459  

Stock-based compensation expense that would have been included in reported net loss if the fair value provisions of FAS 123 had been applied to all awards

     (28,753 )     (33,266 )
    


 


Pro forma

   $ (35,944 )   $ (43,958 )
    


 


Basic and diluted net loss per share:

                

As reported

   $ (0.03 )   $ (0.05 )

Pro forma

   $ (0.13 )   $ (0.16 )

 

The above pro forma disclosures are not necessarily representative of the effects on reported net income or loss for future periods. The fair value of the stock options at the date of grant was estimated using the Black-Scholes model.

 

This excerpt taken from the SCMR 10-Q filed Sep 12, 2005.

4. Stock-Based Compensation

 

The Company accounts for stock-based employee compensation arrangements in accordance with the intrinsic value provisions of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and related interpretations and complies with the disclosure provisions of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation,” (“SFAS 123”), as amended by SFAS No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure”.

 

Under the intrinsic value method, when the exercise price of the Company’s employee stock awards equals the market price of the underlying stock on the date of grant, no compensation expense is recognized in the Company’s Consolidated Statements of Operations. The Company currently recognizes compensation expense under APB 25 relating to certain stock options with exercise prices below fair market value on the date of grant and restricted stock.

 

The Company is required under SFAS 123 to disclose pro forma information regarding the stock awards made to its employees based on specified valuation techniques that produce estimated compensation charges. The pro forma information is as follows (in thousands, except per share data):

 

     Three Months Ended

    Six Months Ended

 
    

January 29,

2005


   

January 24,

2004


   

January 29,

2005


   

January 24,

2004


 
     (as restated)     (as restated)     (as restated)     (as restated)  

Net loss:

                                

As reported

   $ (5,382 )   $ (12,972 )   $ (13,245 )   $ (25,123 )

Stock-based compensation expense included in reported net loss under APB 25

     384       1,918       1,056       3,377  

Stock-based compensation expense that would have been included in reported net loss if the fair value provisions of FAS 123 had been applied to all awards

     (17,806 )     (33,584 )     (46,559 )     (66,850 )
    


 


 


 


Pro forma

   $ (22,804 )   $ (44,638 )   $ (58,748 )   $ (88,596 )
    


 


 


 


Basic and diluted net loss per share:

                                

As reported

   $ (0.02 )   $ (0.05 )   $ (0.05 )   $ (0.09 )

Pro forma

   $ (0.08 )   $ (0.16 )   $ (0.21 )   $ (0.33 )

 

The above pro forma disclosures are not necessarily representative of the effects on reported net income or loss for future periods. The fair value of the stock options at the date of grant was estimated using the Black-Scholes model.

 

This excerpt taken from the SCMR 10-Q filed Feb 25, 2005.

3. Stock-Based Compensation

 

The Company accounts for stock-based employee compensation arrangements in accordance with the intrinsic value provisions of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and related interpretations and complies with the disclosure provisions of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation,” (“SFAS 123”), as amended by SFAS No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure”.

 

Under the intrinsic value method, when the exercise price of the Company’s employee stock awards equals the market price of the underlying stock on the date of grant, no compensation expense is recognized in the Company’s Consolidated Statements of Operations. The Company currently recognizes compensation expense under APB 25 relating to certain stock options and restricted stock with exercise prices below fair market value on the date of grant.

 

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The Company is required under SFAS 123 to disclose pro forma information regarding the stock awards made to its employees based on specified valuation techniques that produce estimated compensation charges. The pro forma information is as follows (in thousands, except per share data):

 

     Three Months Ended

    Six Months Ended

 
    

January 29,

2005


   

January 24,

2004


   

January 29,

2005


   

January 24,

2004


 

Net loss:

                                

As reported

   $ (5,311 )   $ (12,999 )   $ (13,103 )   $ (25,176 )

Stock-based compensation expense included in reported

net loss under APB 25

     313       1,945       914       3,430  

Stock-based compensation expense that would have been included in reported net loss if the fair value provisions of FAS 123 had been applied to all awards

     (5,265 )     (9,875 )     (12,549 )     (19,097 )
    


 


 


 


Pro forma

   $ (10,263 )   $ (20,929 )   $ (24,738 )   $ (40,843 )
    


 


 


 


Basic and diluted net loss per share:

                                

As reported

   $ (0.02 )   $ (0.05 )   $ (0.05 )   $ (0.09 )

Pro forma

   $ (0.04 )   $ (0.08 )   $ (0.09 )   $ (0.15 )

 

The above pro forma disclosures are not necessarily representative of the effects on reported net income or loss for future periods. The fair value of the stock options at the date of grant was estimated using the Black-Scholes model.

 

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