This excerpt taken from the DIS DEF 14A filed Jan 6, 2005.
OPTION GRANTS DURING FISCAL 2004
Number of Options Granted(1)
% of Total Options Granted to Employees in Fiscal Year
Hypothetical Value at Grant Date(2)
Michael D. Eisner
Robert A. Iger
Thomas O. Staggs
Peter E. Murphy
Alan N. Braverman
The Compensation Committee, which administers the Companys stock option and incentive plans, has general authority to accelerate, extend or otherwise modify benefits under
option grants in certain circumstances within overall plan limits.
The hypothetical present value at grant date of options granted during fiscal year 2004 has been calculated using the Black-Scholes option pricing model, based upon the following
assumptions: estimated time until exercise of six years; a risk-free interest rate of 3.43%, representing the interest rate on a U.S. Government zero-coupon bond on the date of grant with a maturity corresponding to the estimated time until
exercise; a volatility rate of 40.0%; and a dividend yield of 0.85%, representing the then current $0.21 per share annual dividend divided by the fair market value of the common stock on the date of grant. The approach used in developing the
assumptions upon which the Black-Scholes valuations were calculated is consistent with the requirements of Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation. The options vest in four
equal annual installments beginning on the first anniversary of the date of grant, subject to acceleration in certain circumstances.