Twenty-First Century Fox 2011 Annual Report Download - page 65

Notes to the Consolidated Financial Statements (continued)
In July 2011, the Company announced that the Board had authorized increasing the total amount of the stock repurchase program remaining
by approximately $3.2 billion to $5 billion. The Company is targeting to acquire the $5 billion of Class A Common Stock and Class B Common
Stock from time to time over the next 12 months.
The program may be suspended or discontinued at any time.
Dividends
For the years ended June 30, 2011 2010 2009
Cash dividend paid per share $0.150 $0.135 $0.120
NOTE 14. Equity Based Compensation
News Corporation 2005 Long-Term Incentive Plan
The Company has adopted the News Corporation 2005 Long-Term Incentive Plan (the “2005 Plan”) under which equity based compensation,
including stock options, restricted stock, restricted stock units (“RSUs”) and other types of awards, may be granted. Such equity grants under the
2005 Plan generally vest over a four-year period and expire ten years from the date of grant. The Company’s employees and directors are eligible
to participate in the 2005 Plan. The Compensation Committee of the Board (the “Compensation Committee”) determines the recipients, type of
award to be granted and amounts of awards to be granted under the 2005 Plan. Stock options awarded under the 2005 Plan will be granted at
exercise prices which are equal to or exceed the market price at the date of grant. The 2005 Plan replaced the News Corporation 2004 Stock
Option Plan under which no additional stock options will be granted. The maximum number of shares of Class A Common Stock that may be
issued under the 2005 Plan is 165 million shares. At June 30, 2011, the remaining number of shares available for issuance under the 2005 Plan
was approximately 121 million. However, a maximum of 38 million shares may be issued in connection with awards of restricted stock, RSUs and
performance share units (“PSUs”). The Company will issue new shares of Class A Common Stock upon exercises of stock options or vesting of
stock-settled RSUs and PSUs.
The fair value of equity-based compensation under the 2005 Plan will be calculated according to the type of award issued.
Stock options and stock appreciation rights (“SARs”) issued under the 2005 Plan will be fair valued using a Black-Scholes option valuation
method that uses the following assumptions: expected volatility is based on the historical volatility of the shares underlying the option; expected
term of awards granted is derived from the historical activity of the Company’s awards and represents the period of time that the awards granted
are expected to be outstanding; weighted average risk-free interest rate is an average of the interest rates of U.S. government bonds with similar
lives on the dates of the stock option grants; and dividend yield is calculated as an average of a ten year history of the Company’s yearly dividend
divided by the fiscal year’s closing stock price.
RSU awards are grants that entitle the holder to shares of Class A Common Stock or the value of shares of Class A Common Stock as the award
vests, subject to the 2005 Plan and such other terms and conditions as the Compensation Committee may establish. RSUs issued under the 2005
Plan are fair valued based upon the fair market value of Class A Common Stock on the grant date. Any person who holds RSUs shall have no
ownership interest in the shares of Class A Common Stock to which suchRSUsrelateuntilandunlesssharesofClassACommonStockare
delivered to the holder. All shares of Class A Common Stock reserved for cancelled or forfeited equity-based compensation awards become available
for future grants. Certain RSU awards are settled in cash and are subject to terms and conditions of the 2005 Plan and such other terms and
conditions as the Compensation Committee may establish.
During the fiscal years ended June 30, 2011, 2010 and 2009, the Company issued 13.4 million, 6.0 million and 12.0 million RSUs,
respectively, which primarily vest over four years. Outstanding RSUs as of June 30, 2011 are payable in shares of the Class A Common Stock,
upon vesting, except for approximately 2.5 million RSUs outstanding that will be settled in cash. RSUs granted to executive directors are settled in
cash and certain awards granted to employees in certain foreign locations are settled in cash. During the fiscal years ended June 30, 2011, 2010
and 2009, approximately 1,630,000, 2,352,000 and 1,781,000 cash-settled RSUs vested, respectively. Cash paid for vested cash-settled RSUs was
approximately $23 million in the fiscal year ended June 30, 2011 and $24 million in both of the fiscal years ended June 30, 2010 and 2009. At
June 30, 2011 and 2010, the liability for cash-settled RSUs and PSUs was approximately $58 million and $25 million, respectively.
Certain executives, who are not named executive officers of the Company, responsible for various business units within the Company had the
opportunity to earn a grant of RSUs under the 2005 Plan in fiscal 2011, 2010 and 2009. These awards (the “Performance Awards”) were
conditioned upon the attainment of pre-determined operating profit goals for fiscal 2011, 2010 and 2009 by the executive’s particular business
unit. If the actual fiscal 2011, 2010 and 2009 operating profit of the executive’s business unit as compared to its pre-determined target operating
profit for the fiscal year was within a certain performance goal range, the executive was entitled to receive a grant of RSUs pursuant to a
Performance Award. To the extent that it was determined that the business unit’s actual fiscal 2011, 2010 and 2009 operating profit fell within
the performance goal range for that fiscal year, the executive received a percentage of his or her annualized base salary, ranging from 0% to
100%, in time-vested RSUs representing shares of Class A Common Stock. The RSUs are generally payable in shares of Class A Common Stock
upon vesting and are subject to the participants’ continued employment with the Company.
In August 2010, the Compensation Committee approved the grant of PSUs that have a three year performance measurement period beginning
for the fiscal year ending June 30, 2011. For executive directors of the Company, each PSU represents the right to receive the U.S. dollar value of
one share of News Corporation’s Class A Common Stock in cash after the completion of the three year performance period, subject to the
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