Computer Associates 2009 Annual Report Download - page 110

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achieved, subject to the approval of the Committee (which has discretion to reduce any award for any reason). The
related compensation cost recognized will be based on the number of shares granted.
Stock Purchase Plan
The Company maintains the Year 2000 Employee Stock Purchase Plan (the Purchase Plan) for all eligible employees. The
Purchase Plan is considered compensatory. Under the terms of the Purchase Plan, employees may elect to withhold
between 1% and 25% of their base pay through regular payroll deductions, subject to Internal Revenue Code limitations.
Shares of the Company’s common stock may be purchased at six-month intervals at 85% of the lower of the fair market
value of the Company’s common stock on the first or last day of each six-month period. During fiscal years 2009, 2008,
and 2007, employees purchased approximately 1.5 million, 1.3 million and 1.5 million shares, respectively, at average
prices of $17.56, $20.19 and $17.47 per share, respectively. As of March 31, 2009, approximately 19.8 million shares
were reserved for future issuance under the Purchase Plan.
The fair value is estimated on the first date of the offering period using the Black-Scholes option pricing model. The fair
values and the weighted average assumptions for the Purchase Plan offer periods commencing in the respective fiscal
years are as follows:
2009 2008 2007
YEAR ENDED MARCH 31,
Weighted average fair value $ 5.89 $ 5.57 $ 4.73
Dividend yield .78% .63% .74%
Expected volatility factor
1
.50 .23 .22
Risk-free interest rate
2
1.1% 4.2% 5.2%
Expected life (in years)
3
0.5 0.5 0.5
1 Expected volatility is measured using historical daily price changes of the Company’s stock over the respective term of the offer period and the implied volatility is derived from the market
prices of the Company’s traded options.
2 The risk-free rate for periods within the contractual term of the offer period is based on the U.S. Treasury yield curve in effect at the beginning of the offer period.
3 The expected life is the six-month offer period.
Note 11 — Profit-Sharing Plan
The Company maintains a defined contribution plan, the CA, Inc. Savings Harvest Plan (CASH Plan), for the benefit of
the U.S. employees of the Company. The CASH Plan is intended to be a qualified plan under Section 401(a) of the
Internal Revenue Code of 1986 (the Code), and contains a qualified cash or deferred arrangement as described under
Section 401(k) of the Code. Pursuant to the CASH Plan, eligible participants may elect to contribute a percentage of
their base compensation. The Company may make matching contributions under the CASH plan. The matching
contributions to the CASH Plan totaled approximately $14 million, $14 million and $13 million for the fiscal years ended
March 31, 2009, 2008 and 2007, respectively. In addition, the Company may make discretionary contributions of
Company common stock to the CASH Plan. Charges for the discretionary contributions to the CASH plan totaled
approximately $24 million, $18 million and $24 for the fiscal years ended March 31, 2009, 2008 and 2007, respectively.
Note 12 — Rights Plan
Each outstanding share of the Company’s common stock carries a Stock Purchase Right issued under the Company’s
Stockholder Protection Rights Agreement, dated October 16, 2006 (the Rights Agreement). Under certain circumstances,
each right may be exercised to purchase one one-thousandth of a share of Participating Preferred Stock, Class A, for $100.
Following (i) the acquisition of 20% or more of the Company’s outstanding common stock by an Acquiring Person as
defined in the Rights Agreement (Walter Haefner and his affiliates and associates are “grandfathered” under this provision
so long as their aggregate ownership of Common Stock does not exceed approximately 126,562,500 shares), or (ii) the
commencement of a tender offer or exchange offer that would result in a person or group owning 20% or more of the
Company’s outstanding common stock, under certain circumstances each right, other than rights held by an Acquiring
Person, may be exercised to purchase common stock of the Company or a successor company with a market value of
twice the $100 exercise price. However, the rights will not be triggered by a Qualifying Offer, as defined in the Rights
Agreement, if holders of at least 10 percent of the outstanding shares of the Company’s common stock request that a
special meeting of stockholders be convened for the purpose of exempting such offer from the Rights Agreement, and
thereafter the stockholders vote at such meeting to exempt such Qualifying Offer from the Rights Agreement. The rights,
which are redeemable by the Company at one cent per right, expire November 30, 2009.
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