LensCrafters 2007 Annual Report Download - page 161

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> 160 | ANNUAL REPORT 2007
The weighted-average fair value of grant-date fair value options granted during the year 2006 was
Euro 5.13. There were no performance grants issued in 2005 or 2007.
The fair value of the stock options granted was estimated at the date of grant using a binomial lattice
model. The following table presents the weighted - average assumptions used in the valuation and
the resulting weighted average fair value per option granted:
As of December 31, 2007 there was Euro 27.1 million of total unrecognized compensation cost
related to non-vested share-based compensation arrangements; that cost is expected to be
recognized over a period of 0.7 years.
Cash received from option exercises under all share-based arrangements and actual tax benefits
realized for the tax deductions from option exercises are disclosed in the consolidated statements
of shareholders’ Equity.
Adoption of SFAS 123 (R). Effective January 1, 2006 the Company adopted the provisions of SFAS
No. 123(R), Share-Based Payment (“SFAS 123(R)”) which requires the Company to measure and
record compensation expense for stock options and other share-based payments based on the fair
value of the instruments. The adoption was made utilizing the modified prospective application
method as defined in SFAS 123(R) and as such applies to awards modified, repurchased or
cancelled after such date and to any portion of awards for which the requisite service has not been
rendered and to every new granted award issued after December 31, 2005. The following table
illustrates the effect on net income and earnings per share had the compensation costs of the plans
been determined under a fair-value based method as stated in SFAS 123 for 2005. The estimated
fair value for each option was calculated using a binomial model:
2007 2006 2005
Plan I Plan II
(a) (b)
Dividend yield - 1.33% 1.33% -
Risk-free interest rate - 3.88% 3.89% -
Expected option life (years) - 5.36 5.53 -
Expected volatility - 26.63% 26.63% -
Weighted average fair value (Euro) - 6.15 5.8 -
(a) Stock Performance Plan issued in July 2006 for a total of 9,500,000 options granted
(b) Stock Performance Plan issued in July 2006 for a total of 3,500,000 options granted