Twenty-First Century Fox 2008 Annual Report Download - page 111

NEWSCORP
Notes to the Consolidated Financial Statements (continued)
Other
The Company operates employee share ownership schemes in the United Kingdom and Ireland. These plans enable employees to enter into fixed-
term savings contracts with independent financial institutions linked to an option for Class A Common Stock. The savings contracts can range
from three to seven years with an average expected life of four years. During the fiscal years ended June 30, 2008, 2007 and 2006, the Company
granted approximately 493,000, 256,000 and 341,000 stock options under this scheme, respectively.
The following table summarizes information about the Company’s stock option transactions for all the Company’s stock option plans
(options in thousands):
Fiscal 2008 Fiscal 2007 Fiscal 2006
Options Weighted average exercise price Options Weighted average exercise price Options Weighted average exercise price
(in US$) (in A$) (in US$) (in A$) (in US$) (in A$)
Outstanding at the beginning of the year 85,358 $15.52 $ 26.18 110,881 $14.52 $24.50 131,367 $13.97 $23.35
Granted (1) 7,643 19.65 * 256 17.72 * 935 16.36 *
Exercised (5,719) 10.35 16.49 (24,719) 11.04 18.59 (16,102) 10.32 16.74
Cancelled (1,537) 15.84 26.46 (1,060) 16.01 28.40 (5,319) 13.98 24.27
Outstanding at the end of the year 85,745 $16.23 $26.74 85,358 $15.52 $ 26.18 110,881 $14.52 $24.50
Vested and unvested expected to vest at June 30, 2008 85,745
Exercisable at the end of the year 83,715 83,521 102,055
Weighted average fair value of options granted $ 4.28 * $ 8.83 * $ 4.20 *
(1) Fiscal 2008 includes options issued as a result of the acquisition of Dow Jones. (See Note 3—Acquisitions, Disposals and Other Transactions.)
* Granted in U.S. dollars.
The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following
assumptions used for grants in fiscal years ended June 30:
2008 2007 2006
Weighted average risk free interest rate 3.10% 4.50% 4.94%
Dividend yield 0.6% 0.7% 0.7%
Expected volatility 22.16% 26.98% 29.52%
Maximum expected life of options 7 years 7 years 7 years
The fair value of each outstanding stock option award under the 2004 Plan was estimated on the date of grant using the Black-Scholes
option valuation model that uses the following assumptions: expected volatility was based on historical volatility of the Class A Common Stock;
expected term of stock options granted was derived from the historical activity of the Company’s stock options and represented the period of time
that stock options granted were expected to be outstanding; weighted average risk-free interest rate was an average of the interest rates of U.S.
government bonds with similar lives on the dates of the stock option grants; and dividend yield was calculated as an average of a ten year history
of the Company’s yearly dividend divided by the fiscal year’s closing stock price.
The exercise prices for the stock options issued prior to the Company’s reorganization in November 2004 are in Australian dollars. The U.S.
dollar equivalents presented above have been converted at historical exchange rates; therefore, the proceeds from the exercise of these options
may differ due to fluctuations in exchange rates in periods subsequent to the date of the grants.
The Company issued 1,325,000 SARs in both fiscal 2005 and fiscal 2004 at exercise prices of $15.20 and $12.99, respectively. At June 30, 2008,
703,125 of the SARs issued in fiscal 2005 and 937,500 of the SARs issued in fiscal 2004 were vested and exercisable. No SARs have been issued
since fiscal 2005.
110 NEWSCORP 2008 Annual Report