Amgen 2001 Annual Report Download - page 46

Exercise price
Shares Low High Weighted-average
Balance unexercised at December 31, 1998 126.2 $ 0.66 $26.22 $12.18
Granted 19.0 $26.25 $57.69 $31.48
Exercised (26.9) $ 0.66 $39.44 $ 9.45
Forfeited (2.5) $ 5.48 $44.97 $17.76
Balance unexercised at December 31, 1999 115.8 $ 0.92 $57.69 $15.88
Granted 13.1 $51.31 $78.00 $67.40
Exercised (28.2) $ 0.92 $72.75 $11.03
Forfeited (2.0) $ 4.48 $74.86 $26.02
Balance unexercised at December 31, 2000 98.7 $ 2.55 $78.00 $23.89
Granted 18.6 $51.51 $74.19 $63.47
Exercised (20.6) $ 2.55 $70.38 $13.12
Forfeited (2.3) $ 5.48 $78.00 $41.43
Balance unexercised at December 31, 2001 94.4 $ 6.19 $78.00 $33.62
AMGEN 2001 ANNUAL REPORT
At December 31, 2001, 2000, and 1999, employee
stock options to purchase 53.4 million, 55.5 million, and
61.7 million shares were exercisable at weighted-average
prices of $20.81, $15.35, and $11.80, respectively.
During the years ended December 31, 2001 and
2000, the Company issued 0.2 million and 0.1 million
shares of restricted common stock, respectively.
Fair value disclosures of employee stock options
Employee stock option grants are set at the closing price
of the Company’s common stock on the date of grant
and the related number of shares granted is fixed at that
point in time. Therefore, under the principles of APB
No. 25, the Company does not recognize compensation
expense associated with the grant of employee stock
options. SFAS No. 123, “Accounting for Stock-Based
Compensation,” requires the use of option valuation
models to provide supplemental information regarding
options granted after 1994. Pro forma information
regarding net income and earnings per share shown
below was determined as if the Company had accounted
for its employee stock options and shares sold under its
employee stock purchase plan under the fair value
method of that statement.
The fair value of the options was estimated at the
date of grant using a Black-Scholes option pricing model
with the following weighted-average assumptions for
2001, 2000, and 1999, respectively: risk-free interest
rates of 4.7%, 5.9%, and 5.8%; dividend yields of 0%,
0%, and 0%; volatility factors of the expected market
Other
In addition to common stock, the Company’s authorized
capital includes 5.0 million shares of preferred stock,
$0.0001 par value, of which 0.7 million shares have been
designated Series A Preferred Stock. At December 31,
2001 and 2000, no shares of preferred stock were issued
or outstanding.
At December 31, 2001, the Company had reserved
166.7 million shares of its common stock which may be
issued through its employee stock option and stock pur-
chase plans and had reserved 0.7 million shares of Series
A Preferred Stock.
Note 7: Employee stock option, stock purchase, and
defined contribution plans
Employee stock option plans
The Company’s employee stock option plans provide
for option grants designated as either nonqualified or
incentive stock options. Option grants to employees
generally vest over a three to five year period and expire
seven years from the date of grant. Most employees are
eligible to receive a grant of stock options periodically
with the number of shares generally determined by the
employee’s salary grade, performance level, and the stock
price. In addition, certain management and professional
level employees normally receive a stock option grant
upon hire. In 2001, most employees received stock
option grants, totaling 5.2 million shares, in which all
shares vest upon the earlier of: (i) five years from the date
of grant or (ii) the date on which the closing price of
Amgen stock equals or exceeds $100.00 per share. As
of December 31, 2001, the Company had 56.3 million
shares of common stock available for future grant under
its employee stock option plans.
Stock option information with respect to all of the
Company’s employee stock option plans is as follows
(shares in millions):
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