Barnes and Noble 2015 Annual Report Download - page 49

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The fair value of the Company’s stock option awards, which
are generally subject to pro-rata vesting annually over four
years, is expensed on a straight-line basis over the vesting
period of the stock options. The expected volatility assump-
tion is based on traded options volatility of the Company’s
stock over a term equal to the expected term of the option
granted. The expected term of stock option awards granted
is derived from historical exercise experience under the
Company’s stock option plans and represents the period
of time that stock option awards granted are expected to be
outstanding. The expected term assumption incorporates
the contractual term of an option grant, which is ten years,
as well as the vesting period of an award, which is gener-
ally pro-rata vesting annually over four years. The risk-
free interest rate is based on the implied yield on a U.S.
Treasury constant maturity with a remaining term equal to
the expected term of the option granted.
The Company recognizes stock-based compensation costs,
net of estimated forfeitures, for only those shares expected
to vest on a straight-line basis over the requisite service
period of the award. The Company estimates the forfeiture
rates based on its historical experience.
The weighted average assumptions relating to the valua-
tion of the Company’s stock options for fiscal year  are
shown below. No stock options were granted during fiscal
 or fiscal .
Fiscal Year 2013
Weighted average fair value of grants $7.80
Volatility 86.13%
Risk-free interest rate 0.67%
Expected life 5 years
Expected dividend yield 0.00%
Stock-Based Compensation Activity
The following table presents a summary of the Company’s
stock option activity:
Number of
Shares (in
thousands)
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value (in
thousands)
Balance, April 28,
2012 3,860 $ 18.76 5.70 years $ 574
Granted 515 11.64
Exercised (279) 12.20
Forfeited (720) 20.19
Balance, April 27,
2013 3,376 $ 17.91
6.24
years $ 7,331
Granted 0 0.00
Exercised (66) 15.71
Forfeited (2,272) 16.95
Balance, May 3,
2014 1,039 $ 20.14
4.53
years $ 725
Granted 0 0.00
Exercised (83) 15.47
Forfeited (501) 24.12
Balance, May 2,
2015 455 $ 16.62
6.27
years $ 3,114
Vested and expected
to vest in the future at
May 2, 2015 438 $ 16.69
6.25
years $ 2,984
Exercisable at May
2, 2015 196 $ 18.14
5.86
years $ 1,245
Available for grant at
May 2, 2015 4,327
The aggregate intrinsic value in the table above represents
the total pre-tax intrinsic value (the difference between
the Company’s closing stock price on the last trading day of
the related fiscal year and the exercise price, multiplied by
the related in-the-money options) that would have been
received by the option holders had they exercised their
options at the end of the fiscal year. This amount changes
based on the market value of the Company’s common
stock. Total intrinsic value of options exercised for fiscal
, fiscal  and fiscal  (based on the difference
between the Company’s stock price on the exercise date and
the respective exercise price, multiplied by the number of
options exercised) was ,  and ,, respectively.
2015 Annual Report 47