Starbucks 2011 Annual Report Download - page 73

Download and view the complete annual report

Please find page 73 of the 2011 Starbucks annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 98

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98

The BSM option valuation model was developed for use in estimating the fair value of traded options, which have
no vesting restrictions and are fully transferable. Our employee stock options have characteristics significantly
different from those of traded options, and changes in the subjective input assumptions can materially affect the fair
value estimate. Because our stock options do not trade on a secondary exchange, employees do not derive a benefit
from holding stock options unless there is an increase, above the grant price, in the market price of the our stock.
Such an increase in stock price would benefit all shareholders commensurately.
Stock option transactions from September 28, 2008, through October 2, 2011 (in millions, except per share and
contractual life amounts):
Shares
Subject to
Options
Weighted
Average
Exercise
Price
per Share
Weighted
Average
Remaining
Contractual
Life (Years)
Aggregate
Intrinsic
Value
Outstanding, September 28, 2008 ......................... 63.0 $20.96 5.7 $115
Granted ............................................. 30.9 8.97
Granted under option exchange program .................... 4.7 14.92
Exercised ........................................... (7.2) 7.31
Expired/forfeited ...................................... (13.5) 18.99
Cancelled under option exchange program .................. (14.3) 29.34
Outstanding, September 27, 2009 ......................... 63.6 14.75 6.7 442
Granted ............................................. 14.9 22.28
Exercised ........................................... (9.6) 11.94
Expired/forfeited ...................................... (8.2) 18.73
Outstanding, October 3, 2010 ............................ 60.7 16.52 6.6 611
Granted ............................................. 4.3 31.46
Exercised ........................................... (16.1) 14.40
Expired/forfeited ...................................... (3.6) 18.06
Outstanding, October 2, 2011 ............................ 45.3 18.57 6.4 848
Exercisable, October 2, 2011 ............................. 23.2 18.81 5.0 272
Vested and expected to vest, October 2, 2011 ................ 42.9 18.48 6.3 571
The aggregate intrinsic value in the table above is the amount by which the market value of the underlying stock
exceeded the exercise price of outstanding options, is before applicable income taxes and represents the amount
optionees would have realized if all in-the-money options had been exercised on the last business day of the period
indicated.
The following is a summary of stock options outstanding at the end of fiscal 2011 (shares in millions):
Options Outstanding Options Exercisable
Range of Prices
Number of
Options
Weighted
Average
Remaining
Contractual
Life
Weighted
Average
Exercise
Price
Number of
Options
Weighted
Average
Exercise
Price
Under $10.00 .............................. 13.9 7.0 $ 8.65 5.0 $ 8.65
$10.01 - $20.00 ............................. 8.7 3.6 14.14 8.5 14.65
$20.01 - $30.00 ............................. 15.0 7.0 23.09 6.1 24.10
Over $30.00 ............................... 7.7 7.0 32.50 3.6 33.62
45.3 6.4 $18.57 23.2 $18.81
67