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RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended February 26, 2011, February 27, 2010 and February 28, 2009
(In thousands, except per share amounts)
14. Stock Option and Stock Award Plans (Continued)
Stock Options
The Company determines the fair value of stock options issued on the date of grant using the
Black-Scholes-Merton option-pricing model. The following assumptions were used for options granted
in fiscal 2011, 2010 and 2009:
2011 2010 2009
Expected stock price volatility ............... 79% 76% 50%
Expected dividend yield ................... 0.00% 0.00% 0.00%
Risk-free interest rate ..................... 1.92% 2.50% 2.76%
Expected option life ...................... 5.5 years 5.5 years 5.25 years
The weighted average fair value of options granted during fiscal 2011, 2010, and 2009 was $0.71,
$0.83, and $0.42, respectively. Following is a summary of stock option transactions for the fiscal years
ended February 26, 2011, February 27, 2010, and February 28, 2009:
Weighted Weighted
Average Average
Exercise Remaining Aggregate
Price Contractual Intrinsic
Shares Per Share Term Value
Outstanding at March 1, 2008 ............ 64,662 4.85
Granted .......................... 14,632 0.90
Exercised .......................... (516) 2.16
Cancelled ......................... (8,616) 6.84
Outstanding at February 28, 2009 .......... 70,162 3.80
Granted .......................... 18,367 1.26
Exercised .......................... (75) 0.89
Cancelled ......................... (12,340) 4.48
Outstanding at February 27, 2010 .......... 76,114 3.08
Granted .......................... 17,443 1.07
Exercised .......................... (244) 0.92
Cancelled ......................... (19,015) 3.66
Outstanding at February 26, 2011 .......... 74,298 2.47 6.79 $9,843
Vested or expected to vest at February 26, 2011 . 65,746 2.50 6.62 $9,843
Exercisable at February 26, 2011 .......... 36,976 3.64 4.96 $2,841
As of February 26, 2011, there was $19,174 of total unrecognized pre-tax compensation costs
related to unvested stock options, net of forfeitures. These costs are expected to be recognized over a
weighted average period of 2.46 years.
Cash received from stock option exercises for fiscal 2011, 2010, and 2009 was $226, $66, and $1,117
respectively. There was no income tax benefit from stock options for fiscal 2011, 2010 and 2009. The
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