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(dollars in thousands, except per share amounts.)
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On July 1, 1992, the Company adopted an Employee Stock Purchase Plan and reserved 2,250,000 shares of Class A common stock for purchase by eligible employees, as defined. The plan provides to eligible employees the opportunity to purchase the Company’s Class A common stock semi-annually on June 30 and December 31. The purchase price is established at a 15 percent discount from fair market value, as defined. As of October 31, 2001, 1,151,732 shares had been acquired under this plan.
The Company has adopted the disclosure-only provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” and continues to apply APB Opinion No. 25 and related interpretations in accounting for its stock-based compensation plans. The following table is a summary of the Company’s stock options outstanding as of October 31, 2001, 2000 and 1999, and the changes that occurred during fiscal years 2001, 2000 and 1999.
The following table further describes the Company’s stock options outstanding as of October 31, 2001.
SFAS No. 123 applies only to options granted under the Company’s incentive plans and shares acquired under the Company’s Employee Stock Purchase Plan since the beginning of the Company’s 1996 fiscal year. Consequently, the pro forma amounts disclosed below do not reflect any compensation cost for the 7,791,034 stock options outstanding as of the beginning of fiscal year 1996 which have all since expired. If the Company had elected to recognize compensation cost for its stock option and employee stock purchase plans based on the fair value at the grant dates for awards under those plans, in accordance with SFAS No. 123, net earnings (loss) and earnings (loss) per share would have been as follows:
The fair value of the Company’s stock options used to compute pro forma net earnings and earnings per share disclosures is the estimated present value at grant date using the Black-Scholes option pricing model with the following weighted average assumptions for fiscal years 2001, 2000 and 1999, respectively: expected dividend yield of .1 percent, .1 percent and .3 percent; expected volatility of 32.9 percent, 39.3 percent and 21.3 percent; risk-free interest rate of 4.7 percent, 6.2 percent and 5.5 percent; and an expected term of 3.8 years, 4.9 years and 4.8 years.
Likewise, the fair value of shares acquired through the Employee Stock Purchase Plan is estimated on each semi-annual grant date using the Black-Scholes option pricing model with the following weighted average assumptions for fiscal years 2001, 2000 and 1999, respectively: expected dividend yield of zero percent, .1 percent and .4 percent; expected volatility of 54.7 percent, 48.3 percent and 38.1 percent; risk-free interest rate of 5.5 percent, 5.8 percent and 4.9 percent; and an expected term of .5 years for all years.
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