Anthem Blue Cross 2002 Annual Report Download - page 76

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NOTES
to Consolidated Financial Statements (Continued)
Anthem, Inc. 2002 Annual Report 71
A summary of the stock option activity for the years ended December 31 is as follows:
Number of Weighted-Average
Options Exercise Price
Balance at January 1, 2001 — $ —
Granted 1,479,000 36.00
Forfeited (20,368) 36.00
Balance at December 31, 2001 1,458,632 36.00
Granted 1,579,970 71.80
Conversion of Trigon options 3,866,770 30.86
Exercised (877,959) 27.36
Forfeited (162,677) 38.53
Balance at December 31, 2002 5,864,736 $43.48
Options exercisable at December 31, 2001 36 $36.00
Options exercisable at December 31, 2002 2,992,899 31.90
Information about stock options outstanding and exercisable as of December 31, 2002 is summarized as follows:
Options Outstanding Options Exercisable
Weighted
Average Weighted Weighted
Remaining Average Average
Number Contractual Exercise Number Exercise
Range of Exercise Prices Outstanding Life Price Exercisable Price
$11.95–$25.46 1,663,294 5.86 $20.22 1,662,594 $20.22
36.00– 45.41 1,983,432 8.75 38.79 679,740 44.13
45.48– 68.89 682,065 8.10 49.90 650,565 48.99
71.86– 71.86 1,535,945 9.34 71.86 — —
During 2002, pursuant to the Stock Plan, the
Company granted 95,300 shares of the Company’s com-
mon stock as restricted stock awards to certain eligible
executives at the fair value of the stock on the grant date.
On December 31, 2004 and 2005, 46,800 of the shares
will vest on each date and 1,700 of the shares will vest on
the earlier of, December 31, 2005, if certain performance
measures are attained, or July 1, 2007. The fair value of
these awards is being amortized to compensation expense
over the awards vesting period. In 2002, compensation
expense totaling $1.5 was recognized.
As of December 31, 2002, there were 4,025,034
shares of common stock available for future grants under
the Stock Plan. On January 27, 2003, the Compensation
Committee of the Board of Directors approved a grant of
up to 2,500,000 stock options to purchase shares of the
Company’s common stock to eligible executives, employ-
ees and non-employee directors.
Employee Stock Purchase Plan
The Company has registered 3,000,000 shares of
common stock for the Employee Stock Purchase Plan
(“Stock Purchase Plan”) which is intended to provide a
means to encourage and assist employees in acquiring a
stock ownership interest in Anthem. The Stock Purchase
Plan was initiated in June 2002 and any employee that
meets the eligibility requirements, as defined, may partic-
ipate. No employee will be permitted to purchase more
than $25,000 (actual dollars) worth of stock in any calen-
dar year, based on the fair market value of the stock at the
beginning of each plan quarter. Employees become partic-
ipants by electing payroll deductions from 1% to 15% of
gross compensation. Payroll deductions are accumulated
during each plan quarter and applied toward the purchase
of stock on the last trading day of each plan quarter. Once
purchased, the stock is accumulated in the employee’s