Amgen 2001 Annual Report Download - page 47

Options outstanding Options exercisable
Weighted-average
Weighted-average remaining Weighted-average
Price range Shares exercise price contractual life Shares exercise price
$10.00 and under 4.1 $ 9.66 0.6 years 4.1 $ 9.66
Over $10.00 to $15.00 24.4 $13.77 2.4 years 23.2 $13.75
Over $15.00 to $30.00 20.6 $17.01 3.6 years 14.6 $17.11
Over $30.00 to $60.00 17.1 $35.04 4.6 years 8.1 $33.37
Over $60.00 28.2 $65.56 6.1 years 3.4 $68.11
models do not provide a reliable single measure of the
fair value of its employee stock options.
For purposes of pro forma disclosures, the estimated
fair values of the options are amortized over the options’
vesting periods. The Company’s pro forma information is
as follows (in millions, except per share information):
Years ended December 31, 2001 2000 1999
Pro forma net income $930.6 $1,035.4 $1,030.0
Pro forma earnings per share:
Basic $ 0.89 $ 1.01 $ 1.01
Diluted $ 0.86 $ 0.95 $ 0.95
Information regarding employee stock options
outstanding as of December 31, 2001 is as follows
(shares in millions):
AMGEN 2001 ANNUAL REPORT
price of the Company’s common stock of 50%, 45%,
and 38%; and expected life of the options of 3.7 years,
3.4 years, and 3.4 years. These assumptions resulted in
weighted-average fair values of $26.74, $25.87, and
$10.55 per share for employee stock options granted in
2001, 2000, and 1999, respectively.
The Black-Scholes option valuation model was
developed for use in estimating the fair value of traded
options. The Company’s employee stock options have
characteristics significantly different from those of traded
options such as vesting restrictions and extremely limited
transferability. In addition, the assumptions used in
option valuation models (see above) are highly subjective,
particularly the expected stock price volatility of the
underlying stock. Because changes in these subjective
input assumptions can materially affect the fair value
estimate, in management’s opinion, existing valuation
Employee stock purchase plan
The Company has an employee stock purchase plan
whereby, in accordance with Section 423 of the Internal
Revenue Code, eligible employees may authorize payroll
deductions of up to 10% of their salary to purchase
shares of the Company’s common stock at the lower of
85% of the fair market value of common stock on the
first or last day of the offering period. During the years
ended December 31, 2001 and 2000, employees pur-
chased 0.6 million and 1.3 million shares at weighted-
average prices of approximately $47.97 and $30.33 per
share, respectively. No shares were purchased under
the employee stock purchase plan during 1999 because
the Company had a 15 month offering period which
extended from January 1, 1999 to March 31, 2000.
At December 31, 2001, the Company had 15.6 million
shares available for future issuance under this plan.
Defined contribution plans
The Company has defined contribution plans covering
substantially all employees in the U.S. and its posses-
sions. Under these plans, the Company makes certain
amounts of matching contributions for those employees
who elect to contribute to the plans and makes additional
contributions based upon the compensation of eligible
employees regardless of whether or not the employees
contribute to the plans. In addition, the Company has
other defined contribution plans covering certain
employees of the Company and employees of its foreign
affiliates. The Company’s expense for its defined contri-
bution plans totaled $45.2 million, $42.6 million, and
$34.3 million for the years ended December 31, 2001,
2000, and 1999, respectively.
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