Garmin 2009 Annual Report Download - page 106

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Weighted‐Average
Grant/ReleasePrice NumberofShares
(InThousands)
OutstandingatDecember29,2007 ‐‐
Granted $19.59 1,044
Released ‐‐
Cancelled ‐(1)
OutstandingatDecember27,2008 $19.59 1,043
Granted $30.44 501
Released $30.14 (204)
Cancelled ‐(24)
OutstandingatDecember26,2009 1,316
RestrictedStockUnits


Theweighted‐averageremainingcontractlifeforoptionsoutstandingandexercisableatDecember26,
2009is6.28and5.49years,respectively.
ThefairvaluefortheseoptionswasestimatedatthedateofgrantusingaBlack‐Scholesoptionpricing
modelwiththefollowingweighted‐averageassumptionsfor2009,2008,and2007:
2009 2008 2007
Weightedaveragefairvalueofoptionsgranted $7.32 $18.47 $33.81
Expectedvolatility 0.4286 0.3845 0.3677
Dividendyield 2.42% 3.75% 0.76%
Expectedlifeofoptionsinyears 6.2 6.0 6.0
Risk‐freeinterestrate 3% 2% 4%

TheBlack‐Scholesoptionvaluationmodelwasdevelopedforuseinestimatingthefairvalueoftraded
optionswhichhavenovestingrestrictionsandarefullytransferable.Inaddition,optionvaluationmodelsrequire
theinputofhighlysubjectiveassumptions,includingtheexpectedstockpricevolatility.BecausetheCompany’s
employeestockoptionshavecharacteristicssignificantlydifferentfromthoseoftradedoptions,andbecause
changesinthesubjectiveinputassumptionscanmateriallyaffectthefairvalueestimate,inmanagement’s
opinion,theexistingmodelsdonotnecessarilyprovideareliablesinglemeasureofthefairvalueofitsemployee
stockoptions.Theweighted‐averagefairvalueforawardsgrantedduring2009,2008,and2007was$29.20,
$37.96and$84.61,respectively.
Thetotalfairvalueofawardsvestedduring2009,2008,and2007was$41,527,$35,384,and$17,840,
respectively.TheaggregateintrinsicvaluesofoptionsoutstandingandexercisableatDecember26,2009were
$36.3millionand$34.6million,respectively.Theaggregateintrinsicvalueofoptionsexercisedduringtheyear
endedDecember26,2009was$3.7million.Aggregateintrinsicvaluerepresentsthepositivedifferencebetween
theCompany’sclosingstockpriceonthelasttradingdayofthefiscalperiod,whichwas$30.98onDecember26,
2009,andtheexercisepricemultipliedbythenumberofoptionsexercised.AsofDecember26,2009,therewas
$111.5millionoftotalunrecognizedcompensationcostrelatedtounvestedshare‐basedcompensationawards
grantedtoemployeesunderthestockcompensationplans.Thatcostisexpectedtoberecognizedoveraperiodof
fiveyears.
EmployeeStockPurchasePlan
Theshareholdersalsoadoptedanemployeestockpurchaseplan(ESPP).Upto2,000,000sharesof
commonstockhavebeenreservedfortheESPP.Shareswillbeofferedtoemployeesatapriceequaltothelesser
of85%ofthefairmarketvalueofthestockonthedateofpurchaseor85%ofthefairmarketvalueonthe
enrollmentdate.TheESPPisintendedtoqualifyasan“employeestockpurchaseplan”underSection423ofthe
InternalRevenueCode.During2009,2008,and2007,209,416,362,902,and120,230shares,respectivelywere