Seagate 2008 Annual Report Download - page 121

Table of Contents
SEAGATE TECHNOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
10. Compensation (Continued)
ESPP Information
During fiscal years 2009 and 2008, the aggregate intrinsic value of options exercised under the Company's ESPP was approximately
$7 million and $12 million, respectively. At July 3, 2009, the total compensation cost related to options to purchase the Company's common
shares under the ESPP but not yet recognized was approximately $0.6 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
2009.
Deferred Compensation Plan
On January 1, 2001, the Company adopted a NQDC 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 designated 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.
Prior to June 18, 2009, the Company had used a corporate-
owned life insurance policy (COLI) to fund the NQDC plan liabilities. The COLI
was held by the Rabbi Trust and recorded in Other assets, net at its cash surrender value. As of June 18, 2009, the Company liquidated the COLI
for net proceeds of $80 million which are held in the Rabbi Trust and recorded as Restricted cash and investments. At July 3, 2009, the assets
held in the rabbi trust were approximately $85 million and are included in Restricted cash and investments. On June 18, 2009, the Company
entered into a Total Return Swap (TRS) in order to substantially offset changes in the NQDC plan liability due to changes in the value of the
investment options made by employees. The Company records all changes in the fair value of the TRS to compensation expense to offset the
market value changes of the NQDC plan liabilities. The Company records gains or losses on the NQDC plan as compensation expenses in cost
of revenue and operating expenses.
The deferred compensation obligation related to the rabbi trust included in Accrued expenses on the accompanying balance sheets was
approximately $89 million and $138 million as of July 3, 2009 and June 27, 2008, respectively.
119
July 31, 2008
January 30, 2009
Shares issued (in millions)
2.5
2.5
Weighted
-
average purchase price per share
$
12.72
$
3.22