|
Thousands of dollars, except per-share amounts and numbers of shares
Stock Option Plans
The Company has employee stock option plans under which options have been granted to purchase shares of the Company’s common stock at prices established by the Compensation and Benefits Committee of the Board of Directors. In addition, the Non-Employee Directors 2000 Stock Option Plan made avail-
able common shares for the granting of options. Each of these plans was terminated with respect to future grants effective upon shareholder approval of the 2004 Employee and Director Equity-Based Compensation Plan in February 2004.
A summary of changes in outstanding options is as follows:
| |
2004 |
2003 |
2002 |
| |
|
|
|
Weighted |
|
|
|
|
Weighted |
|
|
|
|
Weighted |
|
| |
Options |
|
Average |
|
Options |
|
Average |
|
Options |
|
Average |
|
| |
for |
|
Exercise |
|
for |
|
Exercise |
|
for |
|
Exercise |
|
| |
Shares |
|
Price |
|
Shares |
|
Price |
|
Shares |
|
Price |
|
 |
| Balance at October 1 |
30,116,301 |
|
$ |
28.07 |
|
30,388,618 |
|
$ |
26.02 |
|
28,271,329 |
|
$ |
23.80 |
|
| Granted |
4,793,271 |
|
|
39.00 |
|
5,391,172 |
|
|
30.02 |
|
5,460,162 |
|
|
32.45 |
|
| Exercised |
(7,383,786 |
) |
|
23.55 |
|
(5,004,027 |
) |
|
17.26 |
|
(2,570,626 |
) |
|
13.53 |
|
|
| Forfeited, canceled or expired |
(598,981 |
) |
|
32.63 |
|
|
(659,462 |
) |
|
31.59 |
|
(772,247 |
) |
|
31.98 |
|
|
| Balance at September 30 |
26,926,805 |
|
$ |
31.15 |
|
30,116,301 |
|
$ |
28.07 |
|
30,388,618 |
|
$ |
26.02 |
|
|
| Exercisable at September 30 |
16,626,316 |
|
$ |
29.00 |
|
19,389,311 |
|
$ |
26.33 |
|
19,682,329 |
|
$ |
22.92 |
|
|
| Weighted average fair value of options granted |
$ |
13.25 |
|
|
|
|
$ |
10.20 |
|
|
|
|
$ |
11.59 |
|
|
|
|
|
| Available for grant at September 30 |
8,873,890 |
|
|
|
|
11,289,756 |
|
|
|
|
16,020,386 |
|
|
|
|
The maximum term of options is ten years. Options outstanding as of September 30, 2004 expire on various dates from January 2005 through August 2014.
| |
September 30, 2004 |
|
| |
Options Outstanding |
Options Exercisable |
|
| |
|
|
|
Weighted |
Weighted |
|
|
|
Weighted |
|
| |
|
|
|
Average |
Average |
|
|
|
Average |
|
| Range Of |
Number |
|
Exercise |
Remaining |
Number |
|
Exercise |
|
| Option Exercise Price |
Outstanding |
|
Price |
Contractual Life |
Exercisable |
|
Price |
|
|
| $8.64 – $12.55 |
|
298,540 |
|
$ |
12.55 |
|
0.3 Years |
|
298,540 |
|
$ |
12.55 |
|
| 18.83 – 25.63 |
|
3,905,171 |
|
|
23.24 |
|
2.1 Years |
|
3,905,171 |
|
|
23.24 |
|
| 27.25 – 34.96 |
|
16,178,519 |
|
|
30.67 |
|
6.5 Years |
|
10,599,435 |
|
|
30.53 |
|
| 35.03 – 41.64 |
|
6,447,315 |
|
|
37.75 |
|
7.9 Years |
|
1,823,170 |
|
|
35.15 |
|
| 47.61 – 50.85 |
|
97,260 |
|
|
48.78 |
|
9.6 Years |
|
— |
|
|
— |
|
|
| |
|
26,926,805 |
|
$ |
31.15 |
|
6.4 Years |
|
16,626,316 |
|
$ |
29.00 |
|
|
As permitted by SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS No. 123”), the Company follows the disclosure-only provision of the Statement and applies APB Opinion No. 25 and related interpretations in accounting for its employee stock plans. See Note 2 for more information about the SFAS No. 123 accounting treatment of equity-based compensation subsequent to September 30, 2004.
Other Stock Plans
In 2004, the Company adopted the 2004 Employee and Director Equity-Based Compensation Plan (the “2004 Plan”), which provides for long-term incentive compensation to employees and directors consisting of: stock options, stock appreciation rights, performance-based awards, restricted stock units and other stock awards. As of September 30, 2004, 8,873,890 shares remain available for award under the original 9,000,000 share authorization.
The Company has a compensatory Stock Award Plan which allows for grants of common shares to certain key employees. Distribution of 25% or more of each award is deferred until after retirement or involuntary termination, upon which the deferred portion of the award is distributable in five equal annual installments. The balance of the award is distributable over five years from the grant date, subject to certain conditions. During 2004, 50,976 shares were distributed. In 2004, 213,106 shares were granted. No awards were granted in 2003 or 2002. At September 30, 2004, awards for 321,131 shares were outstanding. In February 2004, this plan was terminated with respect to future grants upon the adoption of the 2004 Plan.
The Company has a Restricted Stock Plan for Non-Employee Directors which reserves for issuance 300,000 shares of the Company’s common stock. No restricted shares were issued in 2004, 2003, or 2002.
The Company has a Directors’ Deferral Plan which provides a means to defer director compensation, from time to time, on a deferred stock or cash basis. As of September 30, 2004, 157,670 shares were held in trust, of which 11,576 shares represented Directors’ compensation in 2004, in accordance with the provisions of the Plan. Under the Plan, which is unfunded, directors have an unsecured contractual commitment from the Company to pay directors the amounts due to them under the Plan.
The Company also has a Deferred Compensation Plan that allows certain highly-compensated employees, including executive officers, to defer salary, annual incentive awards and certain equity-based compensation. As of September 30, 2004, 178,447 shares were issuable under this plan.
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