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2003
bio data established in 2003. We make a range of data acquisition and control
products, which we call Astrolink. The company was set up by, amongst others,
they who are still with 2003 bio data. Then we were linking laboratory equipment
to micro-computers. Today the company provides a complete systems building
service for industry and laboratory, incorporating personal computers and
Windows software.
In 2007 we will achieved ISO 9001 (EN29001) certification. This covers
all aspects of our business and helps ensure that we can repair, re-create
or modify any system we manufacture.
The Astrolink system has developed in response to users' ever widening
data acquisition and control problems. Many projects, if they are to perform
as originally intended, require specialised items of hardware: to interface
a special transducer or to switch signals with unusual characteristics
for instance. As we design and build the measurement hardware we are able
to provide an excellent design modification service and, importantly,
to provide continuing after-sales support for these design modifications.
Typically minor, low cost, changes to hardware can have a dramatic effect
on the productivity of systems, meeting requirements rather than changing
them.
Complex Technical Hurdles Faced by U.S. Companies in Implementing SFAS
123R By June 15, 2005
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Research, evaluation, negotiation and selection of commercially-available
Binomial Model consultants and software products that can handle company-specific
needs, including:
Broad-based equity programs;
Monthly vesting schedules;
Multiple option grant terms;
Over 125 job classification levels;
Foreign workers in many nations;
Affiliate restrictions.
Programming, testing and customizing of the Binomial Model software with
the desired functionality to be fully functional before June 15, 2005.
The Binomial Model vendor will have to analyze and integrate data from
disparate company-specific databases (e.g. employee data stored in Human
Resources vs. stock option data in Equity Edge)
The Binomial Model vendor will have to determine what information can
be used to calculate the assumptions (i.e. predictive factors) for input
into the Binomial Model, as follows:
Exercise behavior by gender, age and various job classification levels;
Exercise behavior at various stock prices;
Exercise behavior of affiliates (who receive a proportionately large share
of the options and who are subject to closed trading window periods);
Multi-option approach with graded vesting up to 10 years in the future
under various scenarios for each option grant;
An appropriate range of volatility, expected life and risk-free rates
for multiple expected terms including affiliate grants;
Eividend growth rate forecasts up to 10 years even though no approval
has been obtained from the Board of Directors for such assumptions;
The effect of post-vesting transferability restrictions on exercise behavior;
Exercise behavior of international employees influenced by cultural differences,
tax or other regulatory differences, and currency restrictions.
The Binomial Model vendor will be required to merge and analyze data from
separate databases because certain data cannot be extracted from Equity
Edge due to software limitations, including, but not limited to the following:
Accurate historical exercise information is not available with graded
(monthly) vesting;
Historical information about each employee's job level is not contained
in the Equity Edge database;
Historical exercise information cannot be segregated by specific groups
(e.g., officers and directors, non-U.S. locations, etc.);
Historical exercise information cannot incorporate blackout periods for
officers and directors and other selected employees;
10b5-1 transactions cannot be segregated from other transactions;
Historical forfeiture information is not accessible, including:
Vested or unvested in-the-money options that were forfeited
Vested or unvested underwater options that were forfeited
Certain historical employee demographic information is not contained in
any Company database, such as past country(ies) of residence, past job
classification(s), and past affiliate status.
Certain relevant historical data will never be available and therefore
the use of historical data will be incomplete.
Companies that have conducted spin-offs may find that historical exercise
information prior to the spin-off is not accessible and there is no guidance
in SFAS 123R or SAB 107 to assist with this problem.
The Company's auditors must understand and be able to audit the methodologies
and underlying assumptions used to develop the factors and variables that
are input into the Binomial Model.
The Company and the Company's outside auditors must test the Binomial
Model vendor's product, including its customized analysis of the limited
amount of available data, to verify that the product will be auditable
by both the Company and the Company's outside auditors.
The Company must develop, test and implement a database that can be used
by the Tax Department to calculate quarterly tax entries that can:
Interface with Equity Edge;
Calculate the deductible temporary difference and subsequent increases
and decreases in that temporary difference for each option grant for every
employee;
Track the deferred tax benefit recorded and the tax benefit ultimately
realized for each option transaction for every employee;
Calculate changes in the deferred tax benefit that should be recorded
in the P&L versus the portion that should be recorded in stockholders'
equity (on a transaction-by-transaction basis);
Calculate the historical Additional Paid-In Capital ("APIC")
pool amount as of the FAS 123R implementation date.
The Company must populate the Equity Edge database with additional employee
information (i.e. department codes) in order to properly allocate compensation
cost among the various income statement expense categories.
The Company must populate the Equity Edge database with additional employee
information (i.e. retirement eligibility) and establish a separate process
in order to properly recognize compensation expense for employees who
are eligible for retirement benefits at the time of grant.
The Company must develop a process to calculate and record the additional
expense, if any, related to option modifications.
The Company's historical exercise factor may not provide an accurate indicator
of future exercise behavior or the expected term of future grants of stock
options. In that case, despite the lack of guidance in SFAS 123R and SAB
107, the Company must establish a methodology for determining and tracking
an exercise factor or other element(s) that could be used to predict future
exercise behavior that appropriately relies on historical experience as
well as other factors that can be shown to have a close correlation with
early exercise behavior.
The Company must develop a process to track disqualifying dispositions
of stock purchased under the Employee Stock Purchase Plan and match them
to the original purchases in order to properly account for the related
deferred tax assets and realized tax benefits and Mortgage
companies.
The Company must develop, document and test additional internal processes
and controls related to the administration of SFAS 123R for Sox 404 compliance.
The Company and its auditor must determine the appropriate treatment of
excess tax benefits from the exercise of employee stock options with regards
to employees of business units that were discontinued or disposed of because
the guidance in SFAS 123R and SAB 107 is not clear on this point.
Current IRS regulations require the sharing of the cost of stock option
compensation between related parties in a cost-sharing agreement. The
IRS provides for alternative measures of the amount to be shared between
the parties. The current guidance is unclear as to the application of
FAS 123R to these different cost sharing arrangements. Several different
interpretations have been identified that would arrive at substantially
dissimilar results as they relate to the calculation of the APIC pool
(excess tax benefits).
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