Coach 2009 Annual Report Download - page 57

Download and view the complete annual report

Please find page 57 of the 2009 Coach annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 138

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138

TABLE OF CONTENTS
COACH, INC.
Notes to Consolidated Financial Statements
(dollars and shares in thousands, except per share data)
4. SHARE-BASED COMPENSATION – (continued)
Stock Options
A summary of option activity under the Coach stock option plans as of July 3, 2010 and changes during the year then ended is as
follows:
Number of
Options
Outstanding
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term
(in years)
Aggregate
Intrinsic
Value
Outstanding at June 27, 2009 31,287 $ 29.12
Granted 3,818 29.93
Exercised (8,871) 23.55
Forfeited or expired (1,329) 35.88
Outstanding at July 3, 2010 24,905 30.87 5.7 $ 159,470
Vested or expected to vest at July 3, 2010 24,836 30.87 5.6 159,110
Exercisable at July 3, 2010 15,473 31.09 4.3 101,283
The fair value of each Coach option grant is estimated on the date of grant using the Black-Scholes option pricing model and the
following weighted-average assumptions:
Fiscal Year Ended
July 3,
2010
June 27,
2009
June 28,
2008
Expected term (years) 3.0 3.0 2.6
Expected volatility 49.4% 44.7% 32.9%
Risk-free interest rate 1.7% 2.7% 4.2%
Dividend yield 1.0% 0.0% %
The expected term of options represents the period of time that the options granted are expected to be outstanding and is based on
historical experience. Expected volatility is based on historical volatility of the Company’s stock as well as the implied volatility from
publicly traded options on Coach’s stock. The risk free interest rate is based on the zero-coupon U.S. Treasury issue as of the date of the
grant. Grants subsequent to the Company’s April 2009 Board approval to initiate a quarterly dividend included a dividend yield
assumption based on Coach’s annual expected dividend divided by the grant-date share price. As Coach did not pay dividends during fiscal
2008, there was no dividend yield.
The weighted-average grant-date fair value of options granted during fiscal 2010, fiscal 2009 and fiscal 2008 was $9.68, $8.36 and
$10.74, respectively. The total intrinsic value of options exercised during fiscal 2010, fiscal 2009 and fiscal 2008 was $127,879, $11,495
and $65,922, respectively. The total cash received from option exercises was $208,919, $9,382 and $89,356 in fiscal 2010, fiscal 2009
and fiscal 2008, respectively, and the actual tax benefit realized for the tax deductions from these option exercises was $47,795, $4,427 and
$25,610, respectively.
At July 3, 2010, $46,544 of total unrecognized compensation cost related to non-vested stock option awards is expected to be recognized
over a weighted-average period of 1.0 year.
53