Whole Foods 2007 Annual Report Download - page 66

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Stock Option Plan
We historically granted options to purchase common stock under our 1992 Stock Option Plans, as amended. At our annual
shareholder’s meeting on March 5, 2007, our shareholders approved a new plan, the Whole Foods Market 2007 Stock
Incentive Plan. The fiscal year 2007 options were granted pursuant to this new plan. Our Company has, in connection with
certain of our business combinations, assumed the stock option plans of the acquired companies. All options outstanding
under our Company’s previous plans and plans assumed in business combinations continue to be governed by the terms and
conditions of those grants. Under these plans, options are granted at an option price equal to the market value of the stock at
the grant date and are generally exercisable ratably over a four-year period beginning one year from grant date. Options
granted in fiscal years 2007 and 2006 expire five years from the date of grant and options granted in fiscal year 2005 expire
seven years from date of grant. Certain options granted during fiscal year 2005 were granted fully vested. The market value
of the stock is determined as the closing stock price at the grant date. At September 30, 2007, September 24, 2006 and
September 25, 2005 approximately 5.5 million, 6.5 million and 7.7 million shares of our common stock, respectively, were
available for future stock option grants.
The following table summarizes option activity (in thousands, except per share amounts):
Weighted
Number Weighted Average Aggregate
of Options Average Remaining Intrinsic
Outstanding Exercise Price Contractual Life Value
Outstanding options at September 26, 2004 16,140 $ 25.69
Options granted 12,112 59.82
Options exercised (4,996) 21.64
Options expired (711) 37.33
Outstanding options at September 25, 2005 22,545 $ 44.58
Options granted 1,444 69.00
Options exercised (5,466) 36.00
Options expired (202) 56.57
Options forfeited (46) 64.52
Outstanding options at September 24, 2006 18,275 $ 48.82
Options granted 1,704 39.77
Options exercised (1,879) 26.30
Options expired (704) 60.64
Options forfeited (185) 58.70
Outstanding options at September 30, 2007 17,211 $ 49.80 3.99 $117,247
Vested/expected to vest at September 30, 2007 16,878 $ 49.82 3.98 $115,134
Exercisable options at September 30, 2007 14,407 $ 49.65 3.94 $101,377
The weighted average fair values of options granted during fiscal years 2007, 2006 and 2005 were $9.76, $17.04 and $15.19,
respectively. The aggregate intrinsic value of stock options at exercise, represented in the table above, was approximately
$45.3 million during fiscal year 2007. Total gross unrecognized share-based payments expense related to nonvested stock
options was approximately $27.5 million as of the end of fiscal year 2007, related to approximately 2.8 million shares. We
anticipate this expense to be recognized over a weighted average period of approximately two years.
A summary of options outstanding and exercisable at September 30, 2007 follows (share amounts in thousands):
Options Outstanding
Options Exercisable
Range of Weighted Average Weighted Weighted
Exercise Prices Number Remaining Average Number Average
From To Outstanding Life (in Years) Exercise Price Exercisable Exercise Price
$ 11.44 $ 27.82 2,966 1.71 $ 22.31 2,966 $ 22.31
29.88 39.61 2,258 3.59 39.47 2,232 39.51
39.74 51.83 1,892 4.54 40.11 170 41.73
54.17 60.74 4,081 4.59 54.23 4,028 54.22
66.81 66.81 4,719 4.96 66.81 4,683 66.81
66.96 73.14 1.295 3.61 69.01 328 69.01
Total 17,211 3.99 $ 49.80 14,407 $ 49.65