Computer Associates 2010 Annual Report Download - page 92

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Additional information with respect to stock option plan activity is as follows:
(SHARES IN MILLIONS)
NUMBER
OF SHARES
WEIGHTED AVERAGE
EXERCISE PRICE
Outstanding as of March 31, 2007 21.3 $ 28.72
Granted —
(1)
25.79
Exercised (1.0) 19.17
Expired or terminated (3.5) 36.32
Outstanding as of March 31, 2008 16.8 $ 27.70
Exercised (0.4) 18.85
Expired or terminated (2.3) 32.09
Outstanding as of March 31, 2009 14.1 $ 27.21
Granted 0.1 20.87
Exercised (0.6) 18.96
Expired or terminated (2.3) 41.94
Outstanding as of March 31, 2010 11.3 $ 24.65
(1) Less than 0.1 million shares.
(SHARES IN MILLIONS)
NUMBER
OF SHARES
WEIGHTED AVERAGE
EXERCISE PRICE
Options exercisable at:
March 31, 2008 14.9 $28.22
March 31, 2009 13.5 $27.46
March 31, 2010 11.2 $24.67
The following table summarizes stock option information as of March 31, 2010:
RANGE OF EXERCISE PRICES SHARES
AGGREGATE
INTRINSIC
VALUE
WEIGHTED
AVERAGE
REMAINING
CONTRACTUAL
LIFE
WEIGHTED
AVERAGE
EXERCISE
PRICE SHARES
AGGREGATE
INTRINSIC
VALUE
WEIGHTED
AVERAGE
REMAINING
CONTRACTUAL
LIFE
WEIGHTED
AVERAGE
EXERCISE
PRICE
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
(SHARES AND AGGREGATE INTRINSIC VALUE IN MILLIONS; WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE IN YEARS)
$ 0.00 — $ 20.00 1.2 $ 11.7 3.0 $ 13.74 1.2 $ 11.7 3.0 $ 13.74
$ 20.01 — $ 30.00 9.4 4.6 2.9 25.56 9.4 4.4 2.9 25.59
$ 30.01 — over 0.7 — 2.1 31.02 0.7 — 2.1 31.02
11.3 $ 16.3 2.8 $ 24.65 11.3 $ 16.1 2.8 $ 24.67
(1) Less than 0.1 million shares.
The fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model. The Company
believes that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in
calculating the fair values of the Company’s stock options granted. Estimates of fair value are not intended to predict actual
future events or the value ultimately realized by employees who receive equity awards.
No options were granted in fiscal year 2009. The weighted average estimated values of employee stock option grants, as well
as the weighted average assumptions that were used in calculating such values during fiscal years 2010 and 2008 were
based on estimates at the date of grant as follows:
2010 2009 2008
YEAR ENDED MARCH 31,
Weighted average fair value $ 6.81 $ 0.00 $ 7.84
Dividend yield .77% .00% .62%
Expected volatility factor
(1)
.33 .00 .28
Risk-free interest rate
(2)
2.3% 0.0% 5.1%
Expected life (in years)
(3)
6.0 0.0 4.5
(1) Expected volatility is measured using historical daily price changes of the Company’s stock over the respective expected term of the options and the implied volatility derived from the market
prices of the Company’s traded options.
(2) The risk-free rate for periods within the contractual term of the stock options is based on the U.S. Treasury yield curve in effect at the time of grant.
(3) The expected life is the number of years the Company estimates, based primarily on historical experience, that options will be outstanding prior to exercise.
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