Foot Locker 2005 Annual Report Download - page 112

Option Grants in Last Fiscal Year
Individual Grants(a)
Number of Percent of
Securities Total Options
Underlying Granted to Exercise Grant Date
Options Employees Price Expiration Present
Name Granted(#) in Fiscal Year ($/Share) Date Value($)(b)
M. D. Serra .............................. 115,000 11.6 27.01 2/09/15 744,240
R. T. Mina ............................... 50,000 5.0 28.155 3/23/15 351,504
G. M. Bahler ............................. 25,000 2.5 28.155 3/23/15 175,753
J. L. Berk ................................ 25,000 2.5 28.155 3/23/15 175,753
L. J. Petrucci ............................. 25,000 2.5 28.155 3/23/15 175,753
B. L. Hartman (c) ........................ 25,000 2.5 28.155 (c) 175,753
(a) During 2005 the Compensation and Management Resources Committee granted stock options to
the named executive officers under the 1998 Stock Option and Award Plan (the “1998 Award
Plan’’) and the 2003 Stock Option and Award Plan (the “2003 Award Plan’’).
The per-share exercise price of each stock option may not be less than the fair market value of a
share of Common Stock on the date of grant. In general, no portion of any stock option may be
exercised until the first anniversary of its date of grant. The options granted during 2005 become
exercisable in three substantially equal installments, beginning on the first annual anniversary of
the date of grant. If a participant retires, becomes disabled, or dies while employed by the
Company or one of its subsidiaries, all unexercised options that are then immediately exercisable,
plus those options that would have become exercisable on the next succeeding anniversary of the
date of grant of each option, will remain (or become) immediately exercisable as of that date.
Moreover, upon the occurrence of a “Change in Control,’’ all outstanding options will become
immediately exercisable as of that date.
In general, options may remain exercisable for up to three years following a participant’s
retirement or termination due to disability, and for up to one year for any other termination of
employment for reasons other than cause. However, under no circumstances may an option remain
outstanding for more than ten years from its date of grant.
Options are also outstanding under the 1995 Stock Option and Award Plan (the “1995 Award
Plan’’). The terms of the 1995 Award Plan are substantially the same as the terms of the 1998
Award Plan and the 2003 Award Plan. Under the terms of the 1995 Award Plan, no further awards
may be granted under this plan as of March 8, 2005.
(b) Values were calculated as of the date of grant using a Black-Scholes option pricing model. The
values shown in the table are theoretical and do not necessarily reflect the actual values that the
named executive officers may ultimately realize. Any actual value to the officer will depend on the
extent to which the market value of the Company’s Common Stock at a future date exceeds the
option exercise price. In addition to the fair market value of the Common Stock on the date of
grant and the exercise price, which are identical, the following assumptions were used to calculate
the values shown in the table: a weighted-average risk-free interest rate of 3.99 percent; a stock
price volatility factor of 28 percent; a 3.8 year weighted-average expected award life and a
1.1 percent dividend yield. The assumptions and calculations used for the model are consistent with
the assumptions for reporting stock option valuations used in the Company’s 2005 Annual Report
on Form 10-K.
(c) In connection with the termination of Mr. Hartman’s employment on December 18, 2005, the
vesting of one-third of this stock option grant (8,333 shares) was accelerated, so that Mr. Hartman
was eligible to exercise these shares during the period of December 18, 2005 to March 18, 2006.
The balance of this stock option grant (16,667 shares) was automatically cancelled on
December 18, 2005.
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