Rite Aid 2012 Annual Report Download - page 99

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RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended March 3, 2012, February 26, 2011 and February 27, 2010
(In thousands, except per share amounts)
13. Stock Option and Stock Award Plans (Continued)
The weighted average fair value of options granted during fiscal 2012, 2011, and 2010 was $0.82,
$0.71, and $0.83, respectively. Following is a summary of stock option transactions for the fiscal years
ended March 3, 2012, February 26, 2011, and February 27, 2010:
Weighted Weighted
Average Average
Exercise Remaining Aggregate
Price Contractual Intrinsic
Shares Per Share Term Value
Outstanding at February 28, 2009 ...... 70,162 $3.80
Granted ....................... 18,367 1.26
Exercised ...................... (75) 0.89
Cancelled ...................... (12,340) 4.48
Outstanding at February 27, 2010 ...... 76,114 3.08
Granted ....................... 17,443 1.07
Exercised ...................... (244) 0.92
Cancelled ...................... (19,015) 3.66
Outstanding at February 26, 2011 ...... 74,298 2.47
Granted ....................... 23,200 1.19
Exercised ...................... (896) 1.02
Cancelled ...................... (22,804) 4.31
Outstanding at March 3, 2012 ......... 73,798 $1.52 7.16 $35,568
Vested or expected to vest at March 3,
2012 .......................... 65,622 $1.57 7.04 $31,206
Exercisable at March 3, 2012 .......... 29,544 $2.08 5.95 $12,595
As of March 3, 2012, there was $20,136 of total unrecognized pre-tax compensation costs related
to unvested stock options, net of forfeitures. These costs are expected to be recognized over a weighted
average period of 2.47 years.
On March 21, 2011, the Company launched a Stock Option Exchange Program (‘‘Program’’) for
eligible associates only. Under the Program, eligible associates had the opportunity to surrender certain
stock options for a lesser number of new stock options with an exercise price that was determined
based on the closing market price on April 21, 2011, the day the Program concluded. The number of
new options was determined by applying exchange ratios that resulted in providing new stock options
with an aggregate fair value that approximated the aggregate fair value of the options they replaced.
The new options vest over two years and have a five year life with an exercise price of $1.03. A total of
14.0 million options with an average exercise price in excess of $1.77 were cancelled and 5.3 million
new options were granted with an exercise price of $1.03. The Company recognized a minimal
incremental compensation expense as a result of the Program.
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