Seagate 2008 Annual Report Download - page 118
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Table of Contents
SEAGATE TECHNOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
10. Compensation (Continued)
Fair Value —The fair value of the Company's stock options granted to employees, assumed from Maxtor and issued from the ESPP for
fiscal years 2009, 2008 and 2007 were estimated using the following weighted-average assumptions:
Stock Compensation Expense
Stock Compensation Expense —The Company recorded $83 million, $113 million and $128 million of stock-based compensation during
fiscal years 2009, 2008 and 2007, respectively. Included in these amounts were stock-based compensation of $9 million, $15 million and
$27 million, for fiscal years 2009, 2008 and 2007, respectively, related to assumed options and nonvested shares exchanged in the Maxtor
acquisition.
As required by SFAS No. 123(R), management made an estimate of expected forfeitures and is recognizing compensation costs only for
those equity awards expected to vest.
In accordance with guidance in SFAS No. 123(R), the cash flows resulting from excess tax benefits (tax benefits related to the excess of
proceeds from employee's exercises of stock options over the stock-based compensation cost recognized for those options) are classified as
financing cash flows. The Company did not recognize any cash flows from excess tax benefits during fiscal years 2009 and 2007. The Company
recorded approximately $6 million of excess tax benefits as a financing cash inflow during fiscal year 2008.
116
Fiscal Years Ended
2009
2008
2007
Options under Seagate Plans
Expected term (in years)
4.0
–
4.5
4.0
4.0
Volatility
36
–
50%
35
–
36%
37
–
39%
Expected dividend rate
0
–
12.2%
1.5
–
2.5%
1.3
–
1.9%
Risk
-
free interest rate
1.6
–
3.0%
2.3
–
4.2%
4.4
–
4.8%
Estimated annual forfeitures
4.5%
4.5%
4.5%
Weighted
-
average fair value
$1.47
$7.31
$7.41
Nonvested Shares
Weighted
-
average fair value
$10.55
$22.24
$23.08
Restricted Share Units
Weighted
-
average fair value
$13.47
—
—
ESPP
Expected term (in years)
0.5
0.5
0.5
Volatility
39
–
84%
31
–
36%
33
–
34%
Expected dividend rate
3.0
–
3.2%
1.7
–
2.3%
1.4
–
1.5%
Risk
-
free interest rate
0.4
–
2.0%
2.0
–
5.0%
5.0
–
5.2%
Weighted
-
average fair value
$2.48
$4.67
$5.80