Symantec 2007 Annual Report Download - page 108

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implied volatility of traded options. The risk free interest rate is equal to the U.S. Treasury constant maturity rates
for the period equal to the expected life. We do not currently pay cash dividends on our common stock and do not
anticipate doing so in the foreseeable future. Accordingly, our expected dividend yield is zero. The fair value of each
RSU is equal to the market value of Symantec’s common stock on the date of grant. The fair value of each ESPP
purchase right granted from July 1, 2005 onwards is equal to the 15% discount on shares purchased. We estimate
forfeitures of options, RSUs, and ESPP purchase rights at the time of grant based on historical experience and
record compensation expense only for those awards that are expected to vest.
Stock-based compensation expense
Stock-based compensation is classified in the Consolidated Statements of Income in the same expense line
items as cash compensation. The following table sets forth the total stock-based compensation expense recognized
in our Consolidated Statements of Income.
2007 2006 2005
Year Ended March 31,
(In thousands)
Cost of revenues — Content, subscriptions, and maintenance .... $ 12,373 $ 439 $ —
Cost of revenues — Licenses ............................ 4,064 — —
Sales and marketing .................................. 55,895 13,314 1,298
Research and development.............................. 57,132 17,497 1,780
General and administrative ............................. 24,416 7,151 1,446
Total stock-based compensation ........................ 153,880 38,401 4,524
Tax benefit associated with stock-based compensation expense . . . (35,415) (11,405) (1,437)
Net effect of stock-based compensation expense on net
income ........................................ $118,465 $ 26,996 $ 3,087
As of March 31, 2007, total unrecognized compensation cost related to unvested stock options and RSUs was
$179 million and $28 million, respectively, which is expected to be recognized over the remaining weighted-
average vesting periods of 2.66 years for stock options and 2.68 years for RSUs.
102
SYMANTEC CORPORATION
Notes to Consolidated Financial Statements — (Continued)