Seagate 2011 Annual Report Download - page 105

Table of Contents
SEAGATE TECHNOLOGY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
"Full-Value Share Awards") will generally be counted against the Share Reserve as two and one-tenth shares for every one share granted. As of
June 29, 2012, there were approximately 37.4 million ordinary shares available for issuance under the EIP.
Shares that are subject to Full-Value Share Awards will generally vest over a period of three to four years. Options will generally vest as
follows: 25% of the options will vest on the first anniversary of the vesting commencement date and the remaining 75% will vest ratably each
month thereafter over the next 36 months. Options granted under the EIP have an exercise price equal to the closing price of the Company's
ordinary shares on date of grant.
Seagate Technology plc 2004 Share Compensation Plan (the "SCP"). A maximum of 63.5 million ordinary shares were issuable under
the SCP, including 10 million authorized for issuance of share awards and restricted units. Share awards and restricted units granted to
employees generally vest 25% annually. Options granted to employees generally vest as follows: 25% of the options on the first anniversary of
the vesting commencement date and the remaining 75% proportionately each month over the next 36 months. Options granted under the SCP
were granted at fair market value. On November 4, 2011, the Company filed Post-Effective Amendment No. 1 to deregister 11,041,148 ordinary
shares that remained available for grant as of October 27, 2011 under the SCP and no shares have been granted from the SCP subsequent to that
date.
The Company granted performance awards to its senior executive officers under the SCP that include a market-based condition. A single
award represents the right to receive a single ordinary share of the Company. Vesting is subject to both the continued employment of the
participant by the Company and the achievement of certain performance goals established by the Compensation Committee of the Company's
Board of Directors. During fiscal year 2012 and 2011, the Company granted 0.6 million and 0.3 million of performance awards, respectively,
under the SCP. These awards vest after the end of the performance period of 3 years from the grant date. The performance goals are a three-year
average return on invested capital (ROIC) goal and a relative total shareholder return (TSR) goal, which is based on the Company's ordinary
shares measured against a benchmark TSR of a peer group over the same three-year period. A percentage of these units may vest only if at least
the minimum ROIC goal is met regardless of whether the TSR goal is met. The number of stock units to vest will range from 0% to 200% of the
targeted units. In evaluating the fair value of these units, the Company used a Monte Carlo simulation on the grant date, taking the TSR goal into
consideration. Compensation expense related to these units is only recorded in a period if it is probable that the ROIC goal will be met, and it is
to be recorded at the expected level of achievement.
The Company also granted 0.6 million and 0.2 million of performance awards during fiscal year 2012 and 2011 to its senior executive
officers under the SCP. These awards are awards with a maximum seven-year vesting period, with 25% annual vesting starting on the first
anniversary of the grant date. These units' vesting is contingent on the Company achieving an AEPS goal of $1.00 for the prior fiscal year. If the
performance goal is not achieved, vesting is delayed to a following year in which the AEPS goal is achieved. Any unvested awards from prior
years may vest cumulatively in a future year within the seven
-year vesting period if the annual AEPS goal is achieved during a subsequent year.
If the AEPS goal has not been met by the end of the seven year period, any unvested shares will be forfeited.
Seagate Technology plc Stock Purchase Plan (the "ESPP").
There are 40 million ordinary shares authorized to be issued under the ESPP.
In no event shall the total number of shares issued under the ESPP exceed 75 million ordinary shares. The ESPP consists of a six-month offering
period with a maximum issuance of 1.5 million ordinary shares per offering period. The ESPP permits eligible employees to purchase ordinary
shares through payroll deductions generally at 85% of the fair market value of the
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