Computer Associates 2008 Annual Report Download - page 114

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The weighted average estimated values of employee stock option grants, as well as the weighted average assumptions
that were used in calculating such values during fiscal years 2008, 2007 and 2006 were based on estimates at the date
of grant as follows:
2008 2007 2006
YEAR ENDED MARCH 31,
Weighted average fair value $ 7.84 $ 8.40 $ 15.06
Dividend yield .62% .73% .57%
Expected volatility factor
1
.28 .41 .56
Risk-free interest rate
2
5.1% 4.9% 4.1%
Expected life (in years)
3
4.5 4.5 6.0
1 Expected volatility is measured using historical daily price changes of the Company’s stock over the respective expected term of the options and the implied volatility derived from the
market prices of the Company’s traded options.
2 The risk-free rate for periods within the contractual term of the stock options is based on the U.S. Treasury yield curve in effect at the time of grant.
3 The expected life is the number of years that the Company estimates, based primarily on historical experience, that options will be outstanding prior to exercise. The decrease in the
expected life in fiscal year 2008 and fiscal year 2007 compared with fiscal year 2006 was primarily due to the exclusion of employee exercise behavior related to grants authorized prior to
fiscal year 1997, which expired prior to fiscal year 2007, in estimating the expected term in fiscal year 2007.
The following table summarizes information on shares exercised and shares vested for the periods indicated:
(IN MILLIONS) 2008 2007 2006
YEAR ENDED MARCH 31,
Cash received from options exercised $19 $39 $97
Intrinsic value of options exercised 717 41
Tax benefit from options exercised 2510
The Company settles employee stock option exercises with stock held in treasury.
Restricted Stock and Restricted Stock Unit Awards
The following table summarizes the activity of the RSUs under the Plans:
(SHARES IN MILLIONS)
NUMBER
OF SHARES
WEIGHTED AVERAGE
GRANT DATE
FAIR VALUE
Outstanding as of March 31, 2005 0.2 $ 41.85
Restricted units granted 1.8 27.00
Restricted units released —
1
52.88
Restricted units cancelled (0.2) 27.00
Outstanding as of March 31, 2006 1.8 $ 28.53
Restricted units granted 0.3 21.97
Restricted units released (0.5) 27.48
Restricted units cancelled (0.2) 26.38
Outstanding as of March 31, 2007 1.4 $ 26.86
Restricted units granted 0.2 25.23
Restricted units released (0.6) 27.70
Restricted units cancelled (0.1) 25.06
Outstanding as of March 31, 2008 0.9 $ 27.20
1 Less than 0.1 million shares.
104