Barnes and Noble 1999 Annual Report Download - page 54

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued 53
Had compensation cost for the Company’s stock option grants been determined based on the fair value at the stock option grant
dates consistent with the pro forma method of SFAS 123, the Company’s net earnings and diluted earnings per share for fiscal
1999, 1998 and 1997, would have been reduced by approximately $6,298 or $0.09 per share, $6,188 or $0.09 per share, and $3,863
or $0.06 per share, respectively.
Because the application of the pro forma disclosure provision of SFAS 123 are required only to be applied to grants of options made
by the Company during fiscal 1995 and after, the above pro forma amounts may not be representative of the effects of applying
SFAS 123 to future years.
The weighted-average fair value of the options granted during fiscal 1999, 1998 and 1997 were estimated at $10.00, $12.96 and
$8.05 respectively, using the Black-Scholes option-pricing model with the following assumptions: volatility of 35 percent for fiscal
1999 and fiscal 1998 grants, 28 percent for fiscal 1997 grants, risk-free interest rate of 5.90 percent in fiscal 1999, 5.33 percent
in fiscal 1998, and 6.54 percent in fiscal 1997, and an expected life of 6.0 years for fiscal 1999, 5.4 years for fiscal 1998 and 6.0 years
for fiscal 1997.
A summary of the status of the Company’s stock options is presented below:
Weighted-Average
(Thousands of shares) Shares Exercise Price
Balance, February 1, 1997 9,142 $11.07
Granted 2,254 19.31
Exercised ( 1,546 ) 9.28
Forfeited ( 186 ) 16.25
Balance, January 31, 1998 9,664 13.17
Granted 1,841 31.12
Exercised ( 837 ) 11.11
Forfeited ( 390 ) 22.35
Balance, January 30, 1999 10,278 16.22
Granted 2,148 22.31
Exercised ( 795 ) 11.39
Forfeited ( 488 ) 26.91
Balance, January 29, 2000 11,143 $ 17.27
Options exercisable as of January 29, 2000, January 30, 1999
and January 31, 1998 were 7,133,000, 6,780,000 and
6,558,000, respectively. Options available for grant under the
plans were 4,243,000, 5,902,000 and 2,354,000 at January 29,
2000, January 30, 1999 and January 31, 1998, respectively.