Seagate 2007 Annual Report Download - page 96

Table of Contents
SEAGATE TECHNOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
—
(
Continued)
At June 27, 2008, the total compensation cost related to nonvested shares granted to employees under the Company’s stock option plans
(excluding nonvested shares exchanged in the Maxtor acquisition) but not yet recognized was approximately $7 million, net of estimated
forfeitures of approximately $1 million. This cost is being amortized on a straight-line basis over a weighted-
average remaining term of 2.1 years
and will be adjusted for subsequent changes in estimated forfeitures. In addition, the Company has additional stock-based compensation related
to nonvested shares exchanged in the Maxtor acquisition of approximately $7 million, which will be amortized over a weighted-average period
of approximately 1.8 years.
Performance Shares
At the Company
’
s 2007 Annual General Meeting on October 25, 2007, the Company
’
s shareholders approved the issuance of 925,000
performance shares to senior officers of the Company. Subject to continued employment, these performance shares will vest based upon the
achievement of certain earnings per share performance objectives as defined in the performance share agreements. The requisite service periods
for these awards do not commence until fiscal year 2009. As such, no compensation expense was recognized and no shares vested during fiscal
year 2008. During fiscal year 2008, 16,000 of these performance shares were
cancelled.
ESPP Information
During fiscal years 2008 and 2007, the aggregate intrinsic value of options exercised under the Company’s ESPP was $12 million and
$25 million, respectively. At June 27, 2008, the total compensation cost related to options to purchase the Company’s common shares under the
ESPP but not yet recognized was approximately $2 million. This cost will be amortized on a straight-line basis over a weighted-average period
of approximately 0.2 years.
The following table shows the shares issued, and their respective weighted-average purchase price, pursuant to the ESPP during fiscal year
2008.
Deferred Compensation Plan
Number of
Shares
Weighted
-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value
(In millions)
(In Years)
(In millions)
Outstanding at June 27, 2008
1.9
$
16.56
0.2
$
5.6
Vested and expected to vest at June 27, 2008
1.9
$
16.56
0.2
$
5.6
January 31, 2008
July 31, 2007
Shares issued (in millions)
1.9
1.6
Weighted
-
average purchase price per share
$
17.23
$
19.98
On January 1, 2001, the Company adopted a deferred compensation plan for the benefit of eligible employees. This plan is designed to
permit certain discretionary employer contributions, in excess of the tax limits applicable to the 401(k) plan and to permit employee deferrals in
excess of certain tax limits. Company assets earmarked to pay benefits under the plan are held by a rabbi trust. The Company has adopted the
provisions of EITF No. 97-14, Accounting for Deferred Compensation Arrangements Where Amounts Earned are Held in a Rabbi Trust and
Invested
(EITF 97-14). Under EITF 97-14, the assets and liabilities of a rabbi trust must be accounted for as assets and liabilities of the
Company. In addition all earnings and expenses of the rabbi
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