Computer Associates 2008 Annual Report Download - page 111

granted under the 2002 Plan. As of March 31, 2008, options covering approximately 9.4 million shares were
outstanding, of which options covering approximately 7.6 million shares are exercisable. The outstanding options have
exercise prices ranging from $12.89 — $32.80 per share. As of March 31, 2008, approximately 7.1 million RSAs and
2.5 million RSUs have been awarded to employees, of which approximately 3.6 million and approximately 0.9 million
shares, respectively, were unreleased.
The 2002 Compensation Plan for Non-Employee Directors (the 2002 Director Plan) provided for each eligible director to
receive annual fees in the form of deferred shares and automatic option grants to purchase 6,750 shares of common
stock of the Company, up to a total of 650,000 shares. Pursuant to the 2002 Director Plan, the exercise price of the
options granted was the fair market value of the Company’s stock price on the day of grant. All options expire 10 years
from the date of grant unless otherwise terminated. As of March 31, 2008, all of the options outstanding under the
2002 Director Plan, which cover 35,000 shares, were exercisable, with exercise prices ranging from $11.04 — $23.37 per
share. As of March 31, 2008, approximately 17,000 deferred shares were outstanding in connection with annual director
fees.
The 2003 Compensation Plan for Non-Employee Directors (the 2003 Director Plan) was effective as of August 27, 2003
and amended on August 24, 2005. The 2003 Director Plan provides for each director to receive annual director fees of
$175,000 in the form of deferred shares with an option to elect to receive up to 50% of the fees in cash. In addition,
certain directors receive an additional annual fee for their work as a committee chair, and the chairman of the board
receives an additional fee for his work as the lead director. As of March 31, 2008, approximately 193,000 deferred
shares were outstanding in connection with annual director fees.
The 2007 Incentive Plan (the 2007 Plan), effective June 22, 2007, provides that annual performance bonuses, long-term
performance bonuses, both qualified and non-statutory stock options, restricted stock, and other equity-based awards up
to 30 million shares of common stock of the Company may be granted to select employees and consultants. No more
than 10 million incentive stock options may be granted. As of March 31, 2008, less than 0.1 million RSAs have been
awarded and are unreleased. No options, RSUs or PSU targets have been awarded. As of March 31, 2008, approximately
29.9 million shares were available for future issuance.
As of March 31, 2008, options related to acquired companies’ stock plans covering approximately 0.7 million shares are
outstanding and exercisable with exercise prices ranging from $1.37 — $72.69 per share. Options granted under
acquired companies’ stock plans generally become exercisable over periods ranging from one to five years and generally
expire five to ten years from the date of grant.
Share-Based Compensation
Effective April 1, 2005, the Company adopted, under the modified retrospective basis, the provisions of
SFAS No. 123(R), which requires share-based awards exchanged for employee services to be accounted for under the
fair value method. Accordingly, share-based compensation cost is measured at the grant date, based on the fair value of
the award. The Company uses the straight-line attribution method to recognize share-based compensation costs related
to awards with only service conditions. The expense is recognized over the employee’s requisite service period (generally
the vesting period of the award).
Upon adoption of SFAS No. 123(R), the Company elected to treat awards with only service conditions and with graded
vesting as one award. Consequently, the total compensation expense is recognized ratably over the entire vesting period,
so long as compensation cost recognized at any date at least equals the portion of the grant-date fair value of the award
that is vested at that date.
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