Kodak 2010 Annual Report Download - page 95

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The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model that uses the
assumptions noted in the following table. Expected volatilities are based on historical volatility of the Company's stock,
management's estimate of implied volatility of the Company's stock, and other factors. The expected term of options granted is
derived from the vesting period of the award, as well as historical exercise behavior, and represents the period of time that options
granted are expected to be outstanding. The risk-free rate is calculated using the U.S. Treasury yield curve, and is based on the
expected term of the option. The Company uses historical data to estimate forfeitures.
The Black-Scholes option pricing model was used with the following weighted-average assumptions for options issued in each year:
For the Year Ended
2010
2009
2008
Weighted-average risk-free interest rate
1.50%
2.63%
1.83%
Risk-free interest rates
1.5% - 2.9%
1.9% - 2.7%
1.8% - 2.9%
Weighted-average expected option lives
6 years
6 years
6 years
Expected option lives
6 years
6 years
4 - 6 years
Weighted-average volatility
57%
45%
32%
Expected volatilities
45% - 58%
45%
30% - 32%
Weighted-average expected dividend yield
0.0%
0.4%
7.4%
Expected dividend yields
0.0%
0.0% - 7.1%
3.1% - 7.4%
The weighted-average fair value per option granted in 2010, 2009, and 2008 was $2.16, $2.06, and $0.93, respectively.
As of December 31, 2010, there was $2 million of total unrecognized compensation cost related to unvested options. The cost is
expected to be recognized over a weighted-average period of 1.8 years.
NOTE 21: ACQUISITIONS
2010
There were no significant acquisitions in 2010.
2009
In the third quarter of 2009, the Company acquired the scanner division of BÖWE BELL + HOWELL, which markets a portfolio of
production document scanners that complements the products currently offered within the GCG segment. Through this acquisition,
Kodak expects to expand customer value by providing a wider choice of production scanners. Since Kodak has provided field
service to BÖWE BELL + HOWELL scanners since 2001, this acquisition is also expected to enhance global access to service and
support for channel partners and end-user customers worldwide. This acquisition was immaterial to the Company’s financial position
as of December 31, 2009, and its results of operations and cash flows for the year ended December 31, 2009.
2008
On April 4, 2008, the Company completed the acquisition of Design2Launch (“D2L”), a developer of collaborative end-to-end digital
workflow solutions for marketers, brand owners and creative teams. D2L is part of the Company’s GCG segment.
On April 10, 2008, the Company completed the acquisition of Intermate A/S, a global supplier of remote monitoring and print
connectivity solutions used extensively in transactional printing. Intermate A/S is part of the Company’s GCG segment.
The two acquisitions had an aggregate purchase price of approximately $37 million and were individually immaterial to the
Company’s financial position as of December 31, 2008, and its results of operations and cash flows for the year ended
December 31, 2008.