Chesapeake Energy 2000 Annual Report Download - page 107

A summary of the status of Gothic Energy's stock options as of December 31, 1997, 1998, 1999 and 2000, and
changes during December 31, 1998, 1999 and 2000, is presented below:
The following table summarizes information about Gothic Energy's stock options which were outstanding, and
those which were exercisable, as of December 31, 2000:
Gothic applies Accounting Principles Board Opinion No. 25 in accounting for stock options granted to
employees, including directors, and Statement of Financial Accounting Standards No. 123 ("SFAS No. 123") for
stock options and warrants granted to non-employees. No compensation cost has been recognized in 1998, 1999 or
2000.
Had compensation been determined on the basis of fair value pursuant to SFAS No. 123, net loss and loss per
share would have been increased as follows:
-96-
The fair value of each option granted is estimated using the Black Scholes model. Gothic's stock volatility was
0.81 and 0.95 in 1998 and 1999, respectively, based on previous stock performance. Dividend yield was estimated to
remain at zero with an average risk-free interest rate of 4.81 percent and 5.59 percent in 1998 and 1999, respectively.
Expected life was three years for options issued in both 1998 and 1999 based on the vesting periods involved and the
make up of participating employees within each grant. Fair value of options granted during 1998 and 1999 under the
Stock Option Plan were $643,000 and $646,000, respectively. No options were granted during 2000. As part of the
Merger, all plans terminated on January 16, 2001.
Options Outstanding Options Exercisable
Number
Outstanding Weighted
Average Price Number
Exercisable Weighted
Average Price
Balance at December 31,
Options granted 1997 2,690,000
1,285,000 $1.17
.40
1,850,000 $1.52
Options forfeited (545,000) .40
Balance at December 31,
Options granted 1998 3,430,000
2,185,000 $1.00
.39
1,927,500 $1.47
Options forfeited (380,000) .40
Balance at December 31,
Options exercised 1999 5,235,000
(4,390,000) $.79 .15-53 2,807,500 $1.13
Options forfeited (110,000) .40
Balance at December 31, 2000 735,000 $3.21 735,000 $3.21
1998 1999 2000
($ in thousands, except per share
data)
Net loss available for common shares:
As reported $(140,383) $(25,976) $(3,445)
Pro forma $(l41,232) $(26,439) $(3,751)
Basic and diluted loss per share:
As reported $(8.63) $(1.51) $ (0.17)
Pro forma $(8.68) $(1.54) $ (0.18)
Options Outstanding Options Exercisable
Price Number Weighted Weighted Number Weighted
Range Outstanding Average Life Average Price Exercisable Average Price
$1.50 $3.30 735,000 0.3 years $3.21 735,000 $3.21