Goldman Sachs 2000 Annual Report Download - page 66

64 Goldman Sachs Annual Report 2000
The assumed cost of healthcare has an effect on the amounts reported for the firm’s healthcare plans. A 1% change in the
assumed healthcare cost trend rate would have the following effects:
1% Increase 1% Decrease
(in millions) 2000 1999 2000 1999
Cost $1 $1 $(1) $(1)
Obligation 79(6) (8)
Defined Contribution Plans
The firm contributes to employer-sponsored U.S. and inter-
national defined contribution plans. The firm’s contribution
to these plans was $129 million, $94 million and $70 million
for 2000, 1999 and 1998, respectively.
The firm has also established a nonqualified defined contri-
bution plan (the Plan) for certain senior employees. Shares
of common stock contributed to the Plan and outstanding as
of November 2000 were 12.7 million. The shares of common
stock will vest and generally be distributable to the partici-
pant on specified future dates if the participant satisfies
certain conditions and the participant’s employment with
the firm has not been terminated, with certain exceptions for
terminations of employment due to death or a change in
control. Dividends on the underlying shares of common
stock are paid currently to the participants. Forfeited shares
remain in the Plan and are reallocated to other participants.
Contributions to the Plan are expensed on the date of grant.
Plan expense was immaterial for the year ended November
2000 and was $674 million for the year ended November
1999, which included $666 million granted in connection
with the firm’s initial public offering.
Note 11/Employee Incentive Plans
Stock Incentive Plan
The firm sponsors a stock incentive plan that provides for
grants of incentive stock options, nonqualified stock
options, stock appreciation rights, dividend equivalent
rights, restricted stock, restricted stock units and other
stock-based awards.
The total number of shares of common stock that may be
issued under the stock incentive plan through fiscal 2002
may not exceed 300 million shares and, in each fiscal year
thereafter, may not exceed 5% of the issued and outstand-
ing shares of common stock, determined as of the last day of
the immediately preceding fiscal year, increased by the
number of shares available for awards in previous fiscal
years but not covered by awards granted in such years. As
of November 2000 and November 1999, 156.2 million
shares and 183.4 million shares were available for grant
under the stock incentive plan, respectively.
Restricted Stock Units
The firm issued restricted stock units to employees under
the stock incentive plan, primarily in connection with its
initial public offering and as part of year-end compensa-
tion. Of the total restricted stock units outstanding as of
November 2000 and November 1999, (i) 46.3 million units
and 40.3 million units, respectively, required future service
as a condition to the delivery of the underlying shares of
common stock, and (ii) 33.5 million units and 35.7 million
units, respectively, did not require future service. In all
cases, delivery of the underlying shares of common stock
is conditioned on the grantee’s satisfying certain other
requirements outlined in the award agreements.