Sallie Mae 2015 Annual Report Download - page 143

SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
14. Stock-Based Compensation Plans and Arrangements (Continued)
F-53
There were no options granted in the year ended December 31, 2015. The fair values of the options granted in the years
ended December 31, 2014 and 2013 were estimated as of the grant date using a Black-Scholes option pricing model with the
following weighted average assumptions:
Years Ended December 31,
(Dollars per share) 2014 2013
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.76% 0.65%
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26% 31%
Expected dividend rate . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.48% 3.35%
Expected life of the option . . . . . . . . . . . . . . . . . . . . . . . . 2.9 years 2.8 years
Weighted average fair value of options granted. . . . . . . . $ 3.48 $ 3.11
The expected life of the options is based on observed historical exercise patterns. Groups of employees (and non-
employee directors) that have received similar option grant terms are considered separately for valuation purposes. The
expected volatility is based on implied volatility from publicly traded options on our stock at the grant date and historical
volatility of our stock consistent with the expected life of the option. The risk-free interest rate is based on the U.S. Treasury
spot rate at the grant date consistent with the expected life of the option. The dividend yield is based on the projected annual
dividend payment per share based on the dividend amount at the grant date, divided by the stock price at the grant date.
The following table summarizes stock option activity for the year ended December 31, 2015.
(Dollars in thousands, except per share data) Number of Options
Weighted
Average
Exercise
Price per
Share
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value(1)
Outstanding at December 31, 2014. . . . . . . . . . 16,155,119 $ 9.91
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Exercised(2)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . (2,709,554) 4.76
Canceled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,534,589) 17.69
Outstanding at December 31, 2015(4) . . . . . . . . 11,910,976 $ 10.08 2.4 $ 10,214
Exercisable at December 31, 2015 . . . . . . . . . . 10,599,378 $ 7.49 2.4 $ 10,137
(1) The aggregate intrinsic value represents the total intrinsic value (the aggregate difference between our closing
stock price on December 31, 2015 and the exercise price of in-the-money options) that would have been received
by the option holders if all in-the-money options had been exercised on December 31, 2015.
(2) The total intrinsic value of options exercised was $13.7 million, $11.4 million, and $8.5 million for the years
ended December 31, 2015, 2014 and 2013, respectively.
(3) No cash was received from option exercises for the year ended December 31, 2015. The actual tax benefit
realized for the tax deductions from option exercises totaled $3.7 million for the year ended December 31, 2015.
(4) For net-settled options, gross number is reflected.