Starbucks 2012 Annual Report Download - page 84

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78
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 our
stock. Such an increase in stock price would benefit all shareholders commensurately.
Stock option transactions from September 27, 2009 through September 30, 2012 (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 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
Granted 3.4 44.26
Exercised (13.6) 15.99
Expired/forfeited (2.0) 20.67
Outstanding, September 30, 2012 33.1 22.19 6.1 945
Exercisable, September 30, 2012 18.4 19.96 5.0 567
Vested and expected to vest, September 30, 2012 32.0 21.92 6.0 923
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 2012 (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 9.0 6.0 $ 8.65 5.0 $ 8.65
$10.01 - $20.00 3.6 3.7 15.14 3.3 15.22
$20.01 - $30.00 10.8 6.0 23.14 6.5 23.91
Over $30.00 9.7 7.1 36.36 3.6 32.89
33.1 6.1 $ 22.19 18.4 $ 19.96
$