SNCR » Topics » Stock-Based Compensation

These excerpts taken from the SNCR 10-K filed Mar 13, 2009.
Stock-Based Compensation
 
As of December 31, 2008, we maintain two stock-based compensation plans. Prior to January 1, 2006, we were applying the disclosure only provisions of SFAS 123, Accounting for Stock-Based Compensation (“SFAS 123”). Compensation cost is recognized for all share-based payments granted subsequent to January 1, 2006 and is based on the grant-date fair value estimated in accordance with the provisions of SFAS 123(R). Under SFAS 123(R), an equity instrument is not considered to be issued until the instrument vests. As a result, compensation cost is recognized over the requisite service period with an offsetting credit to additional paid-in capital. Compensation expense also includes the amortization on a straight-line basis over the remaining vesting period of the intrinsic values of the stock options granted prior to 2006 calculated in accordance with Accounting for Stock Issued to Employees (“APB 25”). We classify benefits of tax deductions in excess of the compensation cost recognized (excess tax benefits) as a financing cash inflow with a corresponding operating cash outflow.
 
We utilize the Black-Scholes option pricing model for determining the estimated fair value for stock-based awards. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. Expected volatility was calculated based on a blended weighted-average of historical information of similar public entities for which historical information was available. We will continue to use this approach using other similar public entity volatility information until our historical volatility is relevant to measure expected volatility for future option grants. The average expected life was determined using the SEC shortcut approach as described in Staff Accounting Bulletin (“SAB”) No. 110, which is the mid-point between the vesting date and the end of the contractual term. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with a remaining term equal to the expected life assumed at the date of grant. We have never declared or paid cash dividends on our common or preferred equity and do not anticipate paying any cash dividends in the foreseeable future. Forfeitures are estimated based on voluntary termination behavior, as well as a historical analysis of actual option forfeitures.
 
The weighted-average assumptions used in the Black-Scholes option pricing model are as follows:
 
                 
    Year Ended
    Year Ended
 
    December 31,
    December 31,
 
    2008     2007  
 
Expected stock price volatility
    64 %     59 %
Risk-free interest rate
    3.81 %     4.63 %
Expected life of options (in years)
    5.2       5.9  
Expected dividend yield
    0 %     0 %
 
The weighted-average fair value (as of the date of grant) of the options granted was $8.42, and $12.52 per share for the year ended December 31, 2008, and 2007, respectively. The total stock-based compensation cost related to non-vested equity awards not yet recognized as an expense as of December 31, 2008 was approximately $14.0 million.


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Table of Contents

Stock-Based
Compensation



 



As of December 31, 2008, we maintain two stock-based
compensation plans. Prior to January 1, 2006, we were
applying the disclosure only provisions of SFAS 123,
Accounting for Stock-Based Compensation
(“SFAS 123”). Compensation cost is recognized for
all share-based payments granted subsequent to January 1,
2006 and is based on the grant-date fair value estimated in
accordance with the provisions of SFAS 123(R). Under
SFAS 123(R), an equity instrument is not considered to be
issued until the instrument vests. As a result, compensation
cost is recognized over the requisite service period with an
offsetting credit to additional paid-in capital. Compensation
expense also includes the amortization on a straight-line basis
over the remaining vesting period of the intrinsic values of the
stock options granted prior to 2006 calculated in accordance
with Accounting for Stock Issued to Employees (“APB
25”). We classify benefits of tax deductions in excess of
the compensation cost recognized (excess tax benefits) as a
financing cash inflow with a corresponding operating cash
outflow.


 



We utilize the Black-Scholes option pricing model for
determining the estimated fair value for stock-based awards. Use
of a valuation model requires management to make certain
assumptions with respect to selected model inputs. Expected
volatility was calculated based on a blended weighted-average of
historical information of similar public entities for which
historical information was available. We will continue to use
this approach using other similar public entity volatility
information until our historical volatility is relevant to
measure expected volatility for future option grants. The
average expected life was determined using the SEC shortcut
approach as described in Staff Accounting Bulletin
(“SAB”) No. 110, which is the mid-point between
the vesting date and the end of the contractual term. The
risk-free interest rate is based on U.S. Treasury
zero-coupon issues with a remaining term equal to the expected
life assumed at the date of grant. We have never declared or
paid cash dividends on our common or preferred equity and do not
anticipate paying any cash dividends in the foreseeable future.
Forfeitures are estimated based on voluntary termination
behavior, as well as a historical analysis of actual option
forfeitures.


 



The weighted-average assumptions used in the Black-Scholes
option pricing model are as follows:


 


























































































                 

 

 

Year Ended



 

 

Year Ended



 

 

 

December 31,



 

 

December 31,



 

 

 

2008

 

 

2007

 
 


Expected stock price volatility


 

 

64

%

 

 

59

%


Risk-free interest rate


 

 

3.81

%

 

 

4.63

%


Expected life of options (in years)


 

 

5.2

 

 

 

5.9

 


Expected dividend yield


 

 

0

%

 

 

0

%






 



The weighted-average fair value (as of the date of grant) of the
options granted was $8.42, and $12.52 per share for the year
ended December 31, 2008, and 2007, respectively. The total
stock-based compensation cost related to non-vested equity
awards not yet recognized as an expense as of December 31,
2008 was approximately $14.0 million.





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Table of Contents







Stock-Based Compensation
 
As of December 31, 2008, the Company maintains two stock-based compensation plans. Prior to January 1, 2006, the Company was applying the disclosure only provisions of SFAS No. 123, Accounting for Stock-Based Compensation (“SFAS 123”). Compensation cost is recognized for all share-based payments granted subsequent to January 1, 2006 and is based on the grant-date fair value estimated in accordance with the provisions of SFAS 123(R). Under SFAS 123(R), an equity instrument is not considered to be issued until the instrument vests. As a result, compensation cost is recognized over the requisite service period with an offsetting credit to additional paid-in capital. Compensation expense also includes the amortization on a straight-line basis over the remaining vesting period of the intrinsic values of the stock options granted prior to 2006 calculated in accordance with Accounting for Stock Issued to Employees (“APB 25”).
 
Prior to the adoption of SFAS 123(R), the Company presented its unamortized portion of deferred compensation cost for non-vested stock options in the statement of changes in shareholders deficiency with a corresponding credit to additional paid-in capital. The Company classifies benefits of tax deductions in excess of the compensation cost recognized (excess tax benefits) as a financing cash inflow with a corresponding operating cash outflow. For the year ended December 31, 2008, the Company included $1.4 million of excess tax benefits as a financing cash inflow.
 
Stock-Based
Compensation



 



As of December 31, 2008, the Company maintains two
stock-based compensation plans. Prior to January 1, 2006,
the Company was applying the disclosure only provisions of
SFAS No. 123, Accounting for Stock-Based
Compensation
(“SFAS 123”). Compensation cost
is recognized for all share-based payments granted subsequent to
January 1, 2006 and is based on the grant-date fair value
estimated in accordance with the provisions of SFAS 123(R).
Under SFAS 123(R), an equity instrument is not considered
to be issued until the instrument vests. As a result,
compensation cost is recognized over the requisite service
period with an offsetting credit to additional paid-in capital.
Compensation expense also includes the amortization on a
straight-line basis over the remaining vesting period of the
intrinsic values of the stock options granted prior to 2006
calculated in accordance with Accounting for Stock Issued to
Employees
(“APB 25”).


 



Prior to the adoption of SFAS 123(R), the Company presented
its unamortized portion of deferred compensation cost for
non-vested stock options in the statement of changes in
shareholders deficiency with a corresponding credit to
additional paid-in capital. The Company classifies benefits of
tax deductions in excess of the compensation cost recognized
(excess tax benefits) as a financing cash inflow with a
corresponding operating cash outflow. For the year ended
December 31, 2008, the Company included $1.4 million
of excess tax benefits as a financing cash inflow.


 




These excerpts taken from the SNCR 10-K filed Feb 29, 2008.
Stock-Based Compensation
 
As of December 31, 2007, the Company maintains two stock-based compensation plans. Prior to January 1, 2006, the Company was applying the disclosure only provisions of SFAS No. 123, Accounting for Stock-Based Compensation (“SFAS 123”). Compensation cost is recognized for all share-based payments granted subsequent to January 1, 2006 and is based on the grant-date fair value estimated in accordance with the provisions of SFAS 123(R). Under SFAS 123(R), an equity instrument is not considered to be issued until the instrument vests. As a result, compensation cost is recognized over the requisite service period with an offsetting credit to additional paid-in capital. Compensation expense also includes the amortization on a straight-line basis over the remaining vesting period of the intrinsic values of the stock options granted prior to 2006 calculated in accordance with Accounting for Stock Issued to Employees (“APB 25”).
 
Prior to the adoption of SFAS 123(R), the Company presented its unamortized portion of deferred compensation cost for non-vested stock options in the statement of changes in shareholders deficiency with a corresponding credit to additional paid-in capital. The Company classifies benefits of tax deductions in excess of the compensation cost recognized (excess tax benefits) as a financing cash inflow with a corresponding operating cash outflow. For the year ended December 31, 2007, the Company included $2,960 of excess tax benefits as a financing cash inflow.
 
Stock-Based
Compensation



 



As of December 31, 2007, the Company maintains two
stock-based compensation plans. Prior to January 1, 2006,
the Company was applying the disclosure only provisions of
SFAS No. 123, Accounting for Stock-Based
Compensation
(“SFAS 123”). Compensation cost
is recognized for all share-based payments granted subsequent to
January 1, 2006 and is based on the grant-date fair value
estimated in accordance with the provisions of SFAS 123(R).
Under SFAS 123(R), an equity instrument is not considered
to be issued until the instrument vests. As a result,
compensation cost is recognized over the requisite service
period with an offsetting credit to additional paid-in capital.
Compensation expense also includes the amortization on a
straight-line basis over the remaining vesting period of the
intrinsic values of the stock options granted prior to 2006
calculated in accordance with Accounting for Stock Issued to
Employees
(“APB 25”).


 



Prior to the adoption of SFAS 123(R), the Company presented
its unamortized portion of deferred compensation cost for
non-vested stock options in the statement of changes in
shareholders deficiency with a corresponding credit to
additional paid-in capital. The Company classifies benefits of
tax deductions in excess of the compensation cost recognized
(excess tax benefits) as a financing cash inflow with a
corresponding operating cash outflow. For the year ended
December 31, 2007, the Company included $2,960 of excess
tax benefits as a financing cash inflow.


 




This excerpt taken from the SNCR 10-K filed Mar 16, 2007.
Stock-Based Compensation
 
As of December 31, 2006, the Company maintains two stock-based compensation plans, which are described more fully in Note 8. Effective January 1, 2006, the Company adopted the fair value recognition provisions of SFAS No. 123(R), Share-Based Payment (“SFAS 123(R)”), using the prospective method. Under the prospective method, compensation cost is recognized for all share-based payments granted subsequent to January 1, 2006 and is based on the grant-date fair value estimated in accordance with the provisions of SFAS 123(R). The unamortized portion of the intrinsic value of stock option awards granted prior to 2006 is amortized starting January 1, 2006 on a straight-line basis over the requisite service periods of the awards, which are currently the vesting period. Compensation expense also includes the amortization of the intrinsic values of the stock options granted prior to 2006 calculated in accordance with APB 25. Results for prior periods have not been restated. Prior to January 1, 2006, the Company accounted for its stock-based compensation plan under the recognition and measurement provisions of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (“APB 25”), and related Interpretations, as permitted by SFAS No. 123, Accounting for Stock-Based Compensation (“SFAS 123”). As a result of adopting SFAS 123(R) on January 1, 2006, the Company’s income before income tax expense for the year ended December 31, 2006 was $871 lower than if the Company had continued to account


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Table of Contents

 
SYNCHRONOSS TECHNOLOGIES, INC.
 
NOTES TO FINANCIAL STATEMENTS — (Continued)

for share-based compensation under APB 25. The Company’s net income for the year ended December 31, 2006 was $508, or $0.02 per basic and diluted share, lower than if it had continued to account for share-based compensation under APB 25.
 
Prior to the adoption of SFAS 123(R), the Company presented its unamortized portion of deferred compensation cost for non-vested stock options in the statement of changes in shareholders deficiency with a corresponding credit to additional paid-in capital. Upon the adoption of SFAS 123(R), these amounts were offset against each other as SFAS 123(R) prohibits the “gross-up” of stockholders equity. Under SFAS 123(R), an equity instrument is not considered to be issued until the instrument vests. As a result, compensation cost is recognized over the requisite service period with an offsetting credit to additional paid-in capital.
 
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