Cisco 2011 Annual Report Download - page 130

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The following table summarizes significant ranges of outstanding and exercisable stock options as of July 30,
2011 (in millions, except years and share prices):
STOCK OPTIONS OUTSTANDING STOCK OPTIONS EXERCISABLE
Range of Exercise Prices
Number
Outstanding
Weighted-
Average
Remaining
Contractual
Life
(in Years)
Weighted-
Average
Exercise
Price per
Share
Aggregate
Intrinsic
Value
Number
Exercisable
Weighted-
Average
Exercise
Price per
Share
Aggregate
Intrinsic
Value
$ 0.01 – 15.00 .............. 56 1.59 $10.62 $300 54 $10.74 $282
15.01 – 18.00 .............. 97 3.03 17.72 2 96 17.72 2
18.01 – 20.00 .............. 167 1.91 19.29 — 166 19.29 —
20.01 – 25.00 .............. 154 3.87 22.75 — 144 22.75 —
25.01 – 35.00 .............. 147 5.08 30.65 — 115 30.62 —
Total .................. 621 3.29 $21.79 $302 575 $21.37 $284
The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on the
Company’s closing stock price of $15.97 as of July 29, 2011, which would have been received by the option
holders had those option holders exercised their stock options as of that date. The total number of in-the-money
stock options exercisable as of July 30, 2011 was 57 million. As of July 31, 2010, 606 million outstanding stock
options were exercisable and the weighted-average exercise price was $20.51.
(g) Valuation of Employee Stock Purchase Rights and Employee Stock Options
The valuation of employee stock purchase rights and the underlying assumptions being used are summarized as
follows:
EMPLOYEE STOCK PURCHASE RIGHTS
Years Ended
July 30,
2011
July 31,
2010
July 25,
2009
Weighted-average assumptions:
Expected volatility ................................. 28.0% 30.9% 36.4%
Risk-free interest rate ............................... 0.3% 0.5% 0.6%
Expected dividend .................................. 1.5% 0.0% 0.0%
Weighted-average expected life (in years) ............... 1.3 1.3 1.1
Weighted-average estimated grant date fair value per share ....
$4.24 $6.53 $5.46
The valuation of employee stock options and the underlying assumptions being used are summarized as follows:
EMPLOYEE STOCK OPTIONS
Years Ended July 31, 2010 July 25, 2009
Weighted-average assumptions:
Expected volatility ....................................... 30.5% 36.0%
Risk-free interest rate ..................................... 2.3% 3.0%
Expected dividend ....................................... 0.0% 0.0%
Kurtosis ................................................ 4.1 4.5
Skewness .............................................. 0.20 (0.19)
Weighted-average expected life (in years) ..................... 5.1 5.9
Weighted-average estimated grant date fair value per option ...... $6.50 $ 6.60
The Company estimates on the date of grant the value of employee stock purchase rights using the Black-Scholes
model and the value of employee stock options using a lattice-binomial model. The determination of the fair
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