Mattel 2004 Annual Report Download - page 87

Mattel’s board of directors who are not employees of Mattel. Generally, options are exercisable contingent upon
the grantees’ continued employment with Mattel. Nonqualified stock options are granted at not less than 100% of
the fair market value of Mattel’s common stock on the date of grant. Options granted to employees at market
price usually expire within ten years from the date of grant and vest on a schedule determined by the
Compensation Committee of the board of directors, generally semi-annually over three years. Options granted to
employees at above-market price expire five or ten years from the date of grant, and they vest based on whether
the exercise price is achieved by a specified date. Options granted to non-employee members of the board of
directors usually expire within ten years from the date of grant and vest annually over four years. Mattel’s current
stock option plans, the 1996 and 1999 plans, expire on December 31, 2005 and 2009, respectively. All
outstanding awards under plans that previously expired continue to be exercisable under the terms of their
respective grant agreements. The aggregate number of shares of common stock available for grant under the 1996
and 1999 plans cannot exceed 50.0 million and 12.8 million shares, respectively.
The following is a summary of stock option information and weighted average exercise prices for Mattel’s
stock option plans during the year (options in thousands):
2004 2003 2002
Number Price Number Price Number Price
Outstanding at January 1 ......................... 42,733 $19.07 40,396 $18.65 52,473 $24.82
Options granted ............................ 7,455 16.98 7,394 19.49 7,131 20.02
Options exercised .......................... (1,595) 13.82 (3,663) 13.50 (4,019) 13.57
Options canceled ........................... (3,156) 24.00 (1,394) 23.77 (15,189) 42.16
Outstanding at December 31 ...................... 45,437 $18.57 42,733 $19.07 40,396 $18.65
Exercisable at December 31 ...................... 32,371 $18.69 30,646 $18.96 28,426 $19.21
Available for grant at December 31 ................ 11,274 15,717 15,292
The following table summarizes information about the weighted average remaining contractual life (in
years) and the weighted average exercise prices for Mattel stock options outstanding as of year end 2004 (options
in thousands):
Options Outstanding
Options
Exercisable
Exercise Price Ranges Number
Remaining
Life Price Number Price
$10.31 – $11.26 .................................... 7,123 5.1 $10.75 7,123 $10.75
11.27 – 14.00 .................................... 4,570 4.9 12.68 4,570 12.68
14.01 – 16.95 .................................... 3,610 5.6 15.04 3,588 15.03
16.96 – 19.42 .................................... 7,553 9.2 17.06 982 17.35
19.43 – 20.03 .................................... 6,688 8.4 19.43 1,468 19.43
20.04 – 22.00 .................................... 6,008 7.2 20.05 4,832 20.05
22.01 – 24.98 .................................... 4,073 2.7 23.30 3,996 23.31
24.99 – 30.00 .................................... 3,885 1.8 25.83 3,885 25.83
30.01 – 42.00 .................................... 1,927 2.8 41.75 1,927 41.75
$10.31 – $42.00 .................................... 45,437 6.0 18.57 32,371 18.69
Learning Company Stock Option Plans
Prior to the 1999 merger, Learning Company and its subsidiaries had various incentive and nonqualified
stock option plans that provided benefits for eligible employees and non-employee directors. Effective with the
1999 merger, each option outstanding under these plans was converted into an option to purchase 1.2 shares of
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