Virgin Media 2009 Annual Report Download - page 133

VIRGIN MEDIA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 11—Stock-Based Compensation Plans (Continued)
Virgin Media Sharesave Plan
The Virgin Media Sharesave Plan is a broad based stock option arrangement which enables
eligible employees to receive options to purchase shares of our common stock at a discount. Employees
are invited to take out savings contracts that last for three, five, or seven years. At the end of the
contract, employees use the proceeds of these savings to exercise options granted under the plan.
Under the Virgin Media Sharesave Plan, options to purchase up to 10.0 million shares of our common
stock may be granted to certain of our employees. Accordingly, we have 10.0 million shares of common
stock reserved for issuance under the Virgin Media Sharesave Plan.
Details of the stock option grants, restricted stock grants and restricted stock unit grants under the
stock incentive plans and Virgin Media Sharesave plan are as follows:
Stock Option Grants
All options have a 10 year term and vest and become fully exercisable within five years of
continued employment. We issue new shares upon exercise of the options. The fair value for these
options was estimated at the date of grant using a Black-Scholes option-pricing model with the
following weighted-average assumptions for the years ended December 31, 2009, 2008 and 2007:
Year ended December 31,
2009 2008 2007
Risk-free Interest Rate ................................. 2.34% 2.43% 4.52%
Expected Dividend Yield ................................ 3.05% 1.00% 0.94%
Expected Volatility .................................... 61.48% 33.65% 29.04%
Expected Lives ....................................... 4.6 Years 4.7 Years 4.6 Years
A summary of the status of our stock option grants outstanding as of December 31, 2009, pursuant
to the stock incentive plans and the Virgin Media Sharesave Plan, and of the changes during the year
ended December 31, 2009, is given below.
Stock Incentive Plans Virgin Media Weighted
Non-performance Performance Sharesave Average
Based Based Plan Total Excise Price
Outstanding—beginning of year . . . 15,071,200 467,500 1,866,659 17,405,359 $17.15
Granted .................... 5,915,350 390,000 1,116,107 7,421,457 8.42
Exercised ................... (498,845) — (9,826) (508,671) 8.99
Forfeited or Expired ........... (4,023,325) (100,525) (272,476) (4,396,326) 16.84
Outstanding—end of year ....... 16,464,380 756,975 2,700,464 19,921,819 14.18
Exercisable at end of the year .... 6,393,939 21,975 — 6,415,914 $19.33
The weighted-average grant-date fair value of options granted during the years ended
December 31, 2009, 2008 and 2007, was $3.86, $3.86 and $7.08, respectively. The total intrinsic value of
options exercised during the years ended December 31, 2009, 2008 and 2007, was £1.2 million,
£0.1 million and £23.4 million, respectively.
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