DIRECTV 2009 Annual Report Download - page 124

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DIRECTV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)
The total fair value of restricted stock units vested and distributed was $35 million during the year
ended December 31, 2009, $54 million during the year ended December 31, 2008 and $33 million
during the year ended December 31, 2007.
Stock Options
The Compensation Committee has also granted stock options to acquire our Class A common
stock under our stock plans to certain of our employees and executives. The exercise price of options
granted is equal to at least 100% of the fair market value of the common stock on the date the options
were granted. These nonqualified options generally vest over one to five years, expire seven to ten
years from date of grant and are subject to earlier termination under certain conditions.
Changes in the status of outstanding options were as follows:
Shares Weighted-Average Aggregate
Under Weighted-Average Remaining Intrinsic
Option Exercise Price Contractual Term Value
(in
millions)
Outstanding at January 1, 2009 ........... 37,066,744 $29.38
Stock options and stock appreciation rights
assumed in Liberty Transaction ......... 16,697,580 18.83
Granted ........................... — —
Exercised .......................... (16,478,768) 20.76
Forfeited or expired ................... (7,863,119) 34.70
Outstanding and exercisable at December 31,
2009 ............................ 29,422,437 31.15 1.59 $218
The total intrinsic value of options exercised was $144 million during the year ended December 31,
2009, $38 million during the year ended December 31, 2008 and $59 million during the year ended
December 31, 2007, based on the intrinsic value of individual awards on the date of exercise.
The following table presents the estimated weighted average fair value as of November 19, 2009 of
the 16.7 million stock options and stock appreciation rights assumed under the LEI Plan as part of the
Liberty Transaction using the Black-Scholes valuation model, along with the assumptions used in the
fair value calculations. Expected stock volatility is based primarily on the historical volatility of our
common stock. The risk-free rate for periods within the contractual lives of the options are based on
the U.S. Treasury yield curve in effect at the time of grant. The expected option life is based on
historical exercise behavior, the contractual life of the awards, and other factors.
November 19, 2009
Average estimated fair value per equity instrument assumed ................... $ 14.17
Average exercise price per equity instrument assumed ....................... $ 18.90
Expected stock volatility ............................................. 24.73%
Range of risk-free interest rates ....................................... 0.16 - 2.87%
Range of expected option lives (in years) ................................. 0.7 - 7.5
The holders of the majority of the equity instruments assumed as a result of the Liberty
Transaction did not become DIRECTV employees or directors. Accordingly, we recognize those equity
instruments as a liability that is subject to fair value measurement at each reporting date pursuant to
112