Twenty-First Century Fox 2006 Annual Report Download - page 97

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News Corporation
Notes totheConsolidated Financial Statements (CONTINUED)
The following table summarizesinformation about the Company’s stock option transactions (options in thousands):
Tranches
Options
Outstanding
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Life
Exercisable
Options
Weighted
Average
Exercise
Price
(in US$) (in US$) (in US$)
$3.80 28 3.80 0.48 28 3.80
$6.49 to $9.68 25,692 8.52 5.30 19,108 8.96
$9.96 to $14.70 57,490 12.86 4.93 55,248 12.89
$15.20 to $22.38 15,658 20.35 4.03 15,658 20.35
$23.25 to $27.74 12,013 27.74 3.35 12,013 27.74
110,881 $14.52 102,055 $15.05
NDS Option Schemes
NDS has three executive share option schemes (“the NDS Plans”). The NDS Plans provide for the grant of options to pur-
chase Series Aordinary shares in NDS with a maximum term of ten years. Stock options granted under the NDS Plans vest
over a four-year period. The NDS Plans authorize stock options to be grantedsubject toamaximum of 10% of the ordinary
shares of NDS on issue at the date of grant. All NDS employees are entitled to participate in the NDS Plans, however (with
the exception of the employee share ownership schemes which are opento all), management determines to whom and
how many options are granted.
Asummary of the NDS options (options in thousands):
2006 2005 2004
Options
Weighted
average
exercise price Options
Weighted
average
exercise price Options
Weighted
average
exercise price
(in US$) (in US$) (in US$)
Outstanding at the beginning of the year 4,338 $18.17 4,844 $14.60 4,208$14.06
Granted 942 43.13 721 32.78 864 17.12
Exercised (1,555) 14.00 (1,132) 11.92 (203) 11.01
Cancelled (34) 20.05 (95)21.66 (25) 39.66
Outstanding at the end of the year 3,691 $26.28 4,338 $18.17 4,844 $14.60
Vested and unvested expected to vest at June 30, 2006 3,670
Exercisable at the end of the year 2,150 2,872 2,729
Weighted average fair value of options granted $29.42 $23.59 $11.94
The fair value of each NDS stock option grant is estimated on the date of grant using the Black-Scholes Option Pricing
Model, with the following assumptions: weighted average risk-free interest rate of 4.50%; dividend yield of 0%; expected
volatility of 72%; and expected life of stock options of 6.3 years.
The aggregate intrinsic value of stock options exercised for all of the Company’s plans presented during fiscal 2006,
2005 and 2004 was $123 million, $51 million and $43 million, respectively.
The expense related to equity-based compensation was $132 million for the year ended June 30, 2006. In fiscal 2006,
the Company received $222 million in cash from stock option exercises and recognized ataxbenefit of $35 million on
stock options exercised for all plans presented. In fiscal 2005, the Company received $88 million in cash from stock option
exercises and recognized ataxbenefit of $12 million on stock options exercised for all plans presented. In fiscal 2004, the
Company received $80 million in cash from stock option exercises and recognized ataxbenefit of $12 million on stock
options exercised for all plans presented.
At June 30, 2006, the Company’s total compensation cost related to non-vested stock options, SARs and RSUs not yet
recognized for all plans presented is approximately $236 million, aportion of which is expected to be recognized over the
next three fiscal years. Compensation expense on all stock-based awardsis recognized on astraight line basis over the vest-
ing period of the entire award.
On May 3, 2005, the Compensation Committee approved the acceleration of vesting of unvested out-of-the-money
stock options granted under the 2004 Plan. The affected stock options are those with exercise prices greater than A$19.74
per share, which was the closing price of the Class ACommon Stock (as traded on the Australian Stock Exchange in the
form of CHESS Depositary Interests) on May 2, 2005. Prior to the Reorganization, stock options were granted to employees
ANNUAL REPORT 97