OfficeMax 2008 Annual Report Download - page 89

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The following table provides summarized information about stock options outstanding at
December 27, 2008:
Options Outstanding Options Exercisable
Weighted Weighted Weighted
Average Average Average
Options Contractual Exercise Options Exercise
Range of Exercise Prices Outstanding Life (Years) Price Exercisable Price
$2.50 .................. 11,171 — $ 2.50 11,171 $ 2.50
$18.00 – $28.00 .......... 569,664 1.6 27.65 569,664 27.65
$28.01 – $39.00 .......... 914,960 3.1 34.99 819,627 35.30
The remaining compensation expense to be recognized related to outstanding stock options,
net of estimated forfeitures, is approximately $0.2 million. At December 27, 2008, the aggregate
intrinsic value was $0.1 million for outstanding stock options and exercisable stock options. The
aggregate intrinsic value represents the total pre-tax intrinsic value (i.e. the difference between the
Company’s closing stock price on the last trading day of the fourth quarter of 2008 and the
exercise price, multiplied by the number of in-the-money options at the end of the quarter).
The Company did not grant any stock options during 2008 or 2006. In 2007, the Company
estimated the fair value of each option award on the date of grant using the Black-Scholes option
pricing model with the following weighted-average assumptions: risk-free interest rate of 4.5%
(based on the applicable Treasury bill rate); expected dividends of 60 cents per share (based on
actual cash dividends expected to be paid); expected life of 3.0 years (based on the time period
options are expected to be outstanding based on historical experience); and expected stock price
volatility of 35.5% (based on the historical volatility of the Company’s common stock).
Other
In September 1995, the Company’s Board of Directors authorized the purchase of up to
4.3 million shares of the Company’s common stock. As part of this authorization, the Company
repurchased odd-lot shares (fewer than 100 shares) from shareholders wishing to exit their holdings
in the Company’s common stock. Shares repurchased under this program are retired. The
Company repurchased 50,577 shares of common stock under this authorization, including 907
shares in 2006. The Company’s Board of Directors terminated the share repurchase authorization in
December 2006.
15. Segment Information
The Company manages its business using three reportable segments: OfficeMax, Contract;
OfficeMax, Retail; and Corporate and Other. Management reviews the performance of the Company
based on these segments.
OfficeMax, Contract distributes a broad line of items for the office, including office supplies and
paper, technology products and solutions and office furniture. OfficeMax, Contract sells directly to
large corporate and government offices, as well as small and medium-sized offices in the United
States, Canada, Australia and New Zealand. This segment markets and sells through field
salespeople, outbound telesales, catalogs, the Internet and in some markets, including Canada,
Australia and New Zealand, through office products stores. Substantially all products sold by
OfficeMax, Contract are purchased from third-party manufacturers or industry wholesalers, except
office papers. OfficeMax, Contract purchases office papers primarily from the paper operations of
Boise Cascade, L.L.C., under a 12-year paper supply contract.
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