Computer Associates 2012 Annual Report Download - page 92

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Additional information with respect to stock option plan activity is as follows:
NUMBER
OF SHARES
WEIGHTED
AVERAGE
EXERCISE
PRICE
(in millions)
Outstanding at March 31, 2009 14.1 $ 27.21
Granted 0.1 20.87
Exercised (0.6) 18.96
Expired or terminated (2.3) 41.94
Outstanding at March 31, 2010 11.3 $ 24.65
Granted 1.2 19.34
Exercised (0.5) 18.81
Expired or terminated (4.0) 27.05
Outstanding at March 31, 2011 8.0 $ 23.03
Granted 0.6 21.89
Exercised (1.8) 20.79
Expired or terminated (1.0) 23.46
Outstanding at March 31, 2012 5.8 $ 23.52
NUMBER
OF SHARES
WEIGHTED
AVERAGE
EXERCISE
PRICE
(in millions)
Options exercisable at:
March 31, 2010 11.2 $ 24.67
March 31, 2011 6.8 $ 23.66
March 31, 2012 4.7 $ 24.24
The following table summarizes stock option information at March 31, 2012:
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
RANGE OF EXERCISE PRICES SHARES
AGGREGATE
INTRINSIC
VALUE
WEIGHTED
AVERAGE
REMAINING
CONTRACTUAL
LIFE
WEIGHTED
AVERAGE
EXERCISE
PRICE SHARES
AGGREGATE
INTRINSIC
VALUE
WEIGHTED
AVERAGE
REMAINING
CONTRACTUAL
LIFE
WEIGHTED
AVERAGE
EXERCISE
PRICE
(shares and aggregate intrinsic value in millions; weighted average remaining contractual life in years)
$ 3.55 — $20.00 1.5 $ 16.8 3.2 $ 16.55 1.0 $ 12.4 2.0 $ 15.03
$20.01 — $25.00 1.4 7.8 4.2 21.91 0.8 4.1 2.7 21.98
$25.01 — $30.00 2.6 0.7 2.2 27.43 2.6 0.7 2.2 27.43
$30.01 — over 0.3 — 2.3 31.73 0.3 — 2.3 31.73
5.8 $ 25.3 2.9 $ 23.52 4.7 $ 17.2 2.2 $ 24.24
The fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model. The Company believes
that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair
value of the Company’s stock options. Estimates of fair value are not intended to predict actual future events or the value ultimately
realized by employees who receive equity awards.
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 2012, 2011 and 2010 were based on estimates at the date of grant as follows:
YEAR ENDED MARCH 31,
2012 2011 2010
Weighted average fair value $ 5.99 $ 5.55 $ 6.81
Dividend yield 0.91% 0.83% 0.77%
Expected volatility factor(1) 33% 34% 33%
Risk-free interest rate(2) 1.7% 1.8% 2.3%
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 the Company estimates, based primarily on historical experience, that options will be outstanding prior to exercise. For stock options granted in fiscal year
2012, the Company’s computation of expected life was determined based on the simplified method (the average of the vesting period and option term).
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