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Stock-Based Compensation (Tables)
 12 Months Ended
Sep. 30, 2012
Stock-Based Compensation Expenses

The following table presents stock-based compensation expenses included in the Company’s Consolidated Statements of Operations:

 

     Years Ended September 30  
       2012         2011         2010    
     (Dollars in millions)  

Cost of Sales

    $ 5     $ 5     $ 6  

Selling and administrative expenses

      9       9       11  

Research and technical expenses

      1       1       1  
  

 

 

    

 

 

    

 

 

  

Stock-based compensation expense

      15       15       18  

Income tax benefit

      (5 )      (5 )      (7 ) 
  

 

 

    

 

 

    

 

 

  

Net stock-based compensation expense

    $ 10     $ 10     $ 11  
  

 

 

    

 

 

    

 

 

  
Equity Incentive Plan Activity

The following table summarizes the total stock option, restricted stock, and restricted stock unit activity in the equity incentive plans for fiscal 2012:

 

     September 30, 2012  
     Stock Options     Restricted Stock     Restricted Stock Units  
     Total
Options		     Weighted
Average
Exercise
Price		     Weighted
Average
Grant Date
Fair Value		     Restricted
Stock		     Weighted
Average
Grant  Date
Fair Value		     Restricted
Stock
Units (1)		     Weighted
Average
Grant Date
Fair Value		  
    (Shares in thousands)  

Outstanding at September 30, 2011

     1,772     $ 21.96       $6.06       3     $ 9.56       866      $ 28.89  

Granted

     284       32.95       11.64       —        —        405        33.15  

Performance-based adjustment(2)

     —        —        —        —        —        10        25.93  

Exercised / Vested

     (434 )      19.95       4.72       (1 )      9.56       (15 )       25.64  

Cancelled / Forfeited

     (43 )      33.64       8.26       —        —        (35 )       29.70  
 

 

 

        

 

 

      

 

 

    

Outstanding at September 30, 2012

     1,579       24.17       7.37       2       9.56       1,231        30.28  
 

 

 

        

 

 

      

 

 

    

Exercisable at September 30, 2012

     983        20.03            
 

 

 

              

Expected to vest(3)

     561        30.95            
 

 

 

              

 

(1) 

The number “Granted” represents the number of shares issuable upon vesting of time-based restricted stock units and performance-based restricted stock units, assuming the Company performs at the target performance level in each year of the three-year performance period.

 

(2) 

Represents the net incremental number of shares issuable upon vesting of outstanding performance-based restricted stock units, based on the Company’s actual performance against the performance targets for the 2012 performance period of the outstanding units.

 

(3) 

Stock options expected to vest in the future, net of estimated forfeitures, have a weighted average remaining contractual life of 8.3 years.
Stock Options Outstanding and Vested Options

The following table summarizes information related to the total outstanding options and the vested options on September 30, 2012:

 

     Total
Options
Outstanding		      Exercisable
Options		  

Aggregate Intrinsic Value (in millions)

    $ 20      $ 16  

Weighted Average Remaining Contractual Term (in years)

      7.3        6.7  
Weighted-Average Assumptions

The fair values on the grant date were calculated using the following weighted-average assumptions:

 

     Years Ended September 30  
     2012     2011     2010  

Expected stock price volatility

      45 %      43 %      42 % 

Risk free interest rate

      1.3 %      1.8 %      2.8 % 

Expected life of options (years)

      6        6       6  

Expected annual dividends per year

    $ 0.72      $ 0.72     $ 0.72