ADT 2011 Annual Report Download - page 256

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. Share Plans (Continued)
subsidiaries were eligible to participate in the ESPP. Eligible employees authorized payroll deductions
to be made for the purchase of shares. The Company matched a portion of the employee contribution
by contributing an additional 15% of the employee’s payroll deduction. All shares purchased under the
plan were purchased on the open market by a designated broker.
Under the SAYE Plan, eligible employees in the United Kingdom were granted options to
purchase shares at the end of three years of service at 85% of the market price at the time of grant.
Options under the SAYE Plan are generally exercisable after a period of three years and expire six
months after the date of vesting. The SAYE Plan provided for a maximum of 10 million common
shares to be issued. All of the shares purchased under the SAYE Plan were purchased on the open
market. The SAYE Plan was approved on November 3, 1999 for a ten year period and expired
according to its terms on November 3, 2009. The International Benefits Oversight Committee has not
approved any additional grants since the last annual grant on October 9, 2008 and it has not applied
for approval of a replacement for the SAYE Plan at this time.
A summary of option activity under the SAYE Plan as of September 30, 2011, and changes during
the year then ended is presented below:
Weighted-
Average Aggregate
Weighted- Remaining Intrinsic
Average Contractual Term Value
Shares Exercise Price (in years) ($ in millions)
Outstanding as of September 24, 2010 ....... 243,904 $36.16
Exercised ............................ (136,637) 37.22
Expired ............................. (16,214) 36.63
Forfeited ............................ (6,067) 35.43
Outstanding as of September 30, 2011 ....... 84,986 34.41 0.5 $1
Vested and unvested expected to vest as of
September 30, 2011 ................... 71,236 34.41 0.5 $1
The grant-date-fair value of each option grant is estimated using the Black-Scholes option pricing
model. Assumptions for expected volatility, the average expected life, the risk-free rate, as well as the
expected annual dividend per share were made using the same methodology as previously described
under Share Options.
The weighted-average grant-date fair values of options granted under the SAYE Plan during 2009
were $3.47. There were no options granted under the SAYE Plan during 2011 and 2010. The total
intrinsic value of options exercised during 2011, 2010 and 2009 was $0.4 million, $1 million and
$1 million, respectively. The related excess cash tax benefit classified as a financing cash inflow for
2011, 2010 and 2009 was not material. As of September 30, 2011, there was no material amount of
total unrecognized compensation cost related to non-vested options granted under the SAYE Plan. The
cost is expected to be recognized in the first quarter of fiscal year 2012.
Restricted Share Awards—Restricted share awards are granted subject to certain restrictions.
Conditions of vesting are determined at the time of grant under the 2004 Plan. Restrictions on the
award generally lapse upon normal retirement, if more than twelve months from the grant date, death
or disability of the employee.
2011 Financials 153