ADP 2008 Annual Report Download - page 56

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Summarized information about stock options outstanding as of June 30, 2008 is as follows:
In fiscal 2008, the Company issued 1.9 million shares in connection with the employee stock purchase plan offering that vested on December
31, 2007. The Company expects to issue approximately 1.9 million and 2.0 million shares for the employee stock purchase plan offerings that
vest on December 31, 2008 and 2009, respectively. In addition, in fiscal 2008, the Company issued 481,290 shares of restricted stock.
The fair value of each stock option issued prior to January 1, 2005 was estimated on the date of grant using a Black-Scholes option pricing
model. For stock options issued on or after January 1, 2005, the fair value of each stock option was estimated on the date of grant using a
binomial option pricing model. The binomial model considers a range of assumptions related to volatility, risk-free interest rate and employee
exercise behavior. Expected volatilities utilized in the binomial model are based on a combination of implied market volatilities, historical
volatility of the Company’ s stock price and other factors. Similarly, the dividend yield is based on historical experience and expected future
changes. The risk-free rate is derived from the U.S. Treasury yield curve in effect at the time of grant. The binomial model also incorporates
exercise and forfeiture assumptions based on an analysis of historical data. The expected life of the stock option grants is derived from the
output of the binomial model and represents the period of time that options granted are expected to be outstanding.
56
Outstanding Exercisable
Weighted Weighted
Exercise Number Remaining Average Number Average
Price of Options Life Price of Options Price
Range
(in thousands) (in years)
(in dollars)
(in thousands)
(in dollars)
Under $15 11 0.5 $ 8 11 $ 8
$15 to $25 80.4$22 8 $22
$25 to $35 5,403 3.6 $32 5,254 $32
$35 to $45 34,954 5.7 $40 22,924 $40
$45 to $55 8,751 2.9 $50 8,456 $50