Snapple 2009 Annual Report Download - page 126

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The fair value of each stock option is estimated on the date of grant using the Black-Scholes option-pricing
model with the weighted average assumptions as detailed below:
2009 2008
For the Year Ended
December 31,
Fair value of options at grant date........................................ $ 3.57 $ 7.37
Risk free interest rate ................................................. 2.23% 3.27%
Expected term of options .............................................. 6.1years 5.8 years
Dividend yield(1) .................................................... —% —%
Expected volatility ................................................... 21.46% 22.26%
(1) During the fourth quarter of 2009, the Company declared a dividend. Dividend yield will be included as a
valuation assumption for future stock based compensation awards.
A summary of DPS’ stock option activity for the years ended December 31, 2009, is as follows:
Stock Options
Weighted Average
Exercise Price
Number outstanding at January 1, 2009 ............................. 1,159,619 $ 25.30
Granted .................................................. 1,242,494 $ 13.48
Exercised ................................................. (37,292) $ 22.64
Forfeited or expired ......................................... (186,610) $ 20.96
Outstanding at December 31, 2009 ................................ 2,178,211 $ 18.97
Exercisable at December 31, 2009 ................................ 337,819 $ 25.29
The total intrinsic value of stock options exercised was less than $1 million for the year ended December 31,
2009. There were no stock options exercised during the year ended December 31, 2008.
The following table summarizes information about stock options outstanding as of December 31, 2009 (in
millions except per share and share data):
Range of Exercise Prices Per Share
Number
Outstanding
Weighted Average
Remaining
Contractual Term
(years) Aggregate Intrinsic Value
$13.48 - $25.36 2,178,211 8.79 $ 20
The following table summarizes information about stock options exercisable as of December 31, 2009 (in
millions except per share and share data):
Range of Exercise Prices Per Share
Number
Exercisable
Weighted Average
Remaining
Contractual Term
(years) Aggregate Intrinsic Value
$20.76 - $25.36 337,819 8.36 $ 1
106
DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)