Henry Schein 2009 Annual Report Download - page 106

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HENRY SCHEIN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(In thousands, except share and per share data)
94
Note 14 – Employee Benefit Plans – (Continued)
A summary of the stock option activity under the Plans is presented below:
Shares
Weighted
Average
Exercise Price Shares
Weighted
Average
Exercise Price Shares
Weighted
Average
Exercise Price
Outstanding at beginning
of year .................................... 6,791,828 39.85$ 6,829,453 34.67$ 7,477,321 30.54$
Granted ....................................... 42,206 38.33 1,124,795 59.78 930,112 51.26
Exercised .................................... (445,916) 26.62 (991,259) 25.87 (1,487,238) 23.85
Forfeited ..................................... (93,376) 48.83 (171,161) 45.29 (90,742) 41.92
Outstanding at end of year .......... 6,294,742 40.66 6,791,828 39.85 6,829,453 34.67
Options exercisable at end
of year .................................... 4,835,120 36.31 5,141,140 35.11 5,138,783 30.80
Years ended
December 26, December 27, December 29,
2009 2008 2007
The following weighted-average assumptions were used in determining the fair values of stock options
using the Black-Scholes valuation model:
2009 2008 2007
Expected dividend yield ........................................................................... 0% 0% 0%
Expected stock price volatility .................................................................. 28% 20% 20%
Risk-free interest rate ................................................................................ 1.88% 2.75% 4.75%
Expected life of options (years) ................................................................ 4.5 4.5 4.5
We have not declared cash dividends on our stock in the past and we do not anticipate declaring cash
dividends in the foreseeable future. The expected stock price volatility is based on the evaluation of
implied volatilities from traded call options on our stock and from call options embedded in our existing
convertible debt, historical volatility of our stock and other factors. The risk-free interest rate is based on
the U.S. Treasury yield curve in effect on the date of grant in conjunction with considering the expected
life of options. The expected life of options represents the approximate period of time that granted options
are expected to be outstanding and is based on historical data, including, among other things, option
exercises, forfeitures and cancellations. Estimates of fair value are not intended to predict actual future
events or the value ultimately realized by recipients of stock options, and subsequent events are not
indicative of the reasonableness of the original estimates of fair value made by us.
The following table represents the intrinsic values of:
December 26, December 27, December 29,
2009 2008 2007
Stock options outstanding ................................................... 84,880$ 24,928$ 186,956$
Stock options exercisable .................................................... 82,476 24,928 160,606
As of