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MSFT 48 / 2002 FORM 10-K
Part II
Item 8
Stock options outstanding were as follows:
In millions, except per share amounts
Price per Share
Shares Range
Weighted
Average
Balance, June 30, 1999 766 $ 0.56 – $ 83.28 $ 23.87
Granted 304 65.56 – 119.13 79.87
Exercised (198) 0.56 – 82.94 9.54
Canceled (40) 4.63 – 116.56 36.50
Balance, June 30, 2000 832 0.56 – 119.13 41.23
Granted 224 41.50 – 80.00 60.84
Exercised (123) 0.59 – 85.81 11.13
Canceled (35) 13.83 – 119.13 63.57
Balance, June 30, 2001 898 0.56 – 119.13 49.54
Granted 41 48.62
–
72.57 62.50
Exercised (99) 1.02
–
69.81 12.82
Canceled (38) 1.15
–
116.56 68.67
Balance, June 30, 2002 802 0.79
–
119.13 53.75
For various price ranges, weighted average characteristics of outstanding stock options at June 30, 2002 were as follows:
In millions, except per share amounts
Outstanding Options Exercisable Options
Range of Exercise
Prices Shares Remaining
Life (Years)
Weighted
Average Price Shares Weighted
Average Price
$ 0.79
–
$ 5.97 36 1.6 $ 4.83 35 $ 4.82
5.98
–
13.62 44 0.5 11.19 42 11.18
13.63
–
29.80 90 2.0 15.02 84 14.97
29.81
–
43.62 73 2.7 32.19 66 32.09
43.63
–
60.00 191 6.9 55.81 41 54.03
60.01
–
69.50 146 6.4 66.24 35 66.53
69.51
–
83.28 80 5.1 71.17 21 71.84
83.29
–
119.13 142 4.2 89.87 47 89.29
The Company follows Accounting Principles Board Opinion 25, Accounting for Stock Issued to Employees, to account for stock option and employee
stock purchase plans. An alternative method of accounting for stock options is SFAS 123, Accounting for Stock-Based Compensation. Employee stock
options are valued at grant date using the Black-Scholes valuation model, and this compensation cost is recognized ratably over the vesting period.