LensCrafters 2009 Annual Report Download - page 93

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NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS | 91 <
Number
of options
outstanding
Weighted average
exercise price
in Euro
Weighted average
remaining
contractual term
Aggregate
intrinsic value
Outstanding as of December 31, 2008 10,161,000 13.89
Granted 3,935,000 14.04
Forfeitures (279,200) 17.75
Modifi cations (2,885,000) 23.12
Exercised (943,150) 11.41
Outstanding as of December 31, 2009 9,988,650 14.99 5.80 32,852
Exercisable as of December 31, 2009 4,015,650 14.15 2.84 16,725
The weighted-average fair value of grant-date fair value options granted during the years 2009, 2008 and
2007 was Euro 5.01, Euro 5.02 and Euro 6.03, respectively.
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:
2009 2009 2009 2009 2008 2007
Ordinary plan
for employees
not domiciled
in the USA
Ordinary plan
for employees
domiciled
in the USA
Reassignment
of the 2006/2007
ordinary plans
for employees
domiciled
in the USA
Reassignment of
the 2006/2007
ordinary plans
for employees
not domiciled
in the USA
Ordinary
plan
Ordinary
plan
Dividend yield 1.43% 1.43% 1.43% 1.43% 1.65% 1.43%
Risk-free interest rate 2.66% 2.66% 2.90% 2.66% 3.63% 3.91%
Expected option life (years) 5.65 5.65 5.25 5.65 6.27 5.70
Expected volatility 35.59% 35.59% 36.14% 35.59% 26.93% 23.70%
Expected volatilities are based on implied volatilities from traded share options on the Company's stock,
historical volatility of the Company's share price, and other factors. The expected option life is based
on the historical exercise experience for the Company based upon the date of grant and represents the
period of time that options granted are expected to be outstanding. The risk-free rate for periods within
the contractual life of the option is based on the US Federal Treasury or European government bond yield
curve, as appropriate, in effect at the time of grant.
As of December 31, 2009 there was Euro 13.6 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 1.95 years.
Stock Performance Plans
In October 2004, under a Company performance plan, the Company granted options to acquire an ag-
gregate of 1,000,000 shares of the Company to certain employees of the North American Luxottica Retail
Division which vested and became exercisable on January 31, 2007 as certain fi nancial performance meas-