| |
The 1992 Incentive Equity
Plan as amended in 1999, authorizes the Company to
issue up to 1,700,000 Common Shares upon the exercise
of Options Rights, as Restricted Shares, in payment
of Performance Shares or Performance Units that have
been earned, as Deferred Shares, or in payment of
dividend equivalents paid on awards made under the
Plan. Such shares may be shares of original issuance,
treasury shares, or a combination of both. Stock options
may be granted at a price not less than the fair market
value of the stock on the date the option is granted,
generally are not subject to re-pricing, and must
be exercisable not later than ten years and one day
after the date of grant. Stock appreciation rights
may be granted either at or after the time of a stock
option grant. Common Shares may be awarded or sold
to certain employees with disposition restrictions
over specified periods. The 1996 Nonemployee Directors’
Compensation Plan authorizes the Company to issue
up to 50,000 Common Shares to nonemployee Directors.
The Plan was amended effective in 1999 to provide
for the grant of 2,000 Restricted Shares to nonemployee
Directors first elected on or after January 1, 1999,
and also provides that nonemployee Directors must
take at least 40 percent of their annual retainer
in Common Shares. The Restricted Shares vest five
years from the date of award. The Company recorded
expense of $.9 million in 2000, a credit of $.3 million
in 1999, and expense of $2.5 million in 1998 relating
to other stock-based compensation, primarily the Performance
Share program.
FASB Statement 123 requires
pro forma disclosure of net income and
earnings per share as if the fair value
method for valuing stock options had been
applied. The Company’s pro forma
information follows:
| |
2000 |
1999 |
1998 |
|
|
|
|
| Net income (millions) |
$17.3 |
$3.1 |
$57.2 |
| Earnings per share |
|
|
|
| Basic |
$1.67 |
$0.28 |
$5.09 |
| Diluted |
$1.66 |
$0.28 |
$5.05 |
The fair value of these
options was estimated at the date of grant
using a Black-Scholes option pricing model
with the following weighted-average assumptions
for 2000, 1999 and 1998:
| |
2000 |
1999 |
1998 |
|
|
|
|
| Risk-free interest
rate |
6.67% |
4.79% |
5.47% |
| Dividend yield |
4.04% |
3.42% |
3.15% |
| Volatility factor
– market price of Company’s common
stock |
.241 |
.223 |
.224 |
| Expected life
of options – years |
4.31 |
6.15 |
4.31 |
| Weighted-average
fair value of options granted during the year |
$5.93 |
$5.52 |
$8.65 |
Compensation costs included
in the pro forma information reflect fair
values associated with options granted
after January 1, 1995. Pro forma information
may not be indicative of future pro forma
information applicable to future outstanding
awards.
Stock option, restricted
stock award, deferred stock allocation,
and performance share activities under
the Company’s Incentive Equity Plans,
and the Nonemployee Directors’ Compensation
Plan are summarized as follows:
| |
2000 |
1999 |
1998 |
|
|
|
|
| |
Shares |
Price(1) |
Shares |
Price(1) |
Shares |
Price(1) |
|
|
|
|
| Stock options:
|
|
|
|
|
|
|
| Options
outstanding at beginning of year |
774,242 |
$51.59 |
346,742 |
$41.04 |
252,625 |
$39.00 |
| Granted
during the year |
171,950 |
29.56 |
454,150 |
58.88 |
128,450 |
44.56 |
| Exercised |
(28,375) |
20.12 |
(6,750) |
21.98 |
(18,616) |
34.96 |
| Expired |
(5,400) |
20.12 |
|
|
|
|
| Canceled |
(39,720) |
44.14 |
(19,900) |
43.98 |
(15,717) |
44.26 |
|
|
|
|
|
|
|
| Options
outstanding at end of year |
872,697 |
48.81 |
774,242 |
51.59 |
346,742 |
41.04 |
| Options
exercisable at end of year |
285,333 |
43.69 |
221,126 |
39.90 |
138,609 |
36.22 |
| |
|
|
|
|
|
|
| Restricted awards:
|
|
|
|
|
|
|
| Awarded
and restricted at beginning of year |
53,223 |
|
52,296 |
|
49,449 |
|
| Awarded
during the year |
|
|
4,000 |
|
5,000 |
|
| Vested |
(19,287) |
|
(3,073) |
|
(2,153) |
|
| Issued
as performance shares |
26,051 |
|
|
|
|
|
|
|
|
|
|
|
|
| Awarded
and restricted at end of year |
59,987 |
|
53,223 |
|
52,296 |
|
| |
|
|
|
|
|
|
| Deferred stock
awards: |
|
|
|
|
|
|
| Awarded
at beginning of year |
|
|
|
|
|
|
| Issued
as performance shares |
22,315 |
|
|
|
|
|
| Awarded
during the year |
7,112 |
|
|
|
|
|
|
|
|
|
|
|
|
| Awarded
at end of year |
29,427 |
|
|
|
|
|
| |
|
|
|
|
|
|
| Performance
shares: |
|
|
|
|
|
|
| Allocated
at beginning of year |
174,950 |
|
176,050 |
|
161,000 |
|
| Allocated
during the year |
101,816 |
|
69,472 |
|
73,554 |
|
| Issued |
(48,336) |
|
(59,672) |
|
(58,504) |
|
| Forfeited/canceled |
|
|
(10,900) |
|
|
|
|
|
|
|
|
|
|
| Allocated
at end of year |
228,400 |
|
174,950 |
|
176,050 |
|
| |
|
|
|
|
|
|
| Required retainer
and voluntary shares: |
|
|
|
|
|
|
| Awarded
at beginning of year |
9,980 |
|
6,649 |
|
4,548 |
|
| Awarded
during the year |
9,394 |
|
10,255 |
|
6,649 |
|
| Issued |
(9,980) |
|
(6,924) |
|
(4,548) |
|
|
|
|
|
|
|
|
| Awarded
at end of year |
9,394 |
|
9,980 |
|
6,649 |
|
| |
|
|
|
|
|
|
| Reserved for
future grants or awards at end of year |
313,075 |
|
563,627 |
|
520,704 |
|
(1)Weighted-Average Exercise Price |
Exercise prices for options outstanding
as of December 31, 2000 ranged from $29.56 to $75.80,
with 80 percent of options outstanding having exercise
prices greater than $43.00. The weighted-average remaining
contractual life of options outstanding is 8.6 years
at December 31, 2000.
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