Travelers 2001 Annual Report Download - page 65

The St. Paul Companies 2001 Annual Report 63
Non-U.S. Plans — We also have separate stock option plans for
certain employees of our non-U.S. operations. The options granted
under these plans were priced at the market price of our common
stock on the grant date. Generally, they can be exercised from three
to 10 years after the grant date. Approximately 250,000 option
shares were available at Dec. 31, 2001 for future grants under our
non-U.S. plans.
Global Stock Option Plan (“GSOP”) — We have a separate fixed
stock option plan for employees who are not eligible to participate
in the U.S. and non-U.S. plans previously described. Options granted
to eligible employees under the GSOP are contingent upon the
company achieving threshold levels of profitability, and the number
of options granted is determined by the level of profitability
achieved. Generally, options granted under this plan can be
exercised from three to 10 years after the grant date. At Dec. 31,
2001, approximately 1,300,000 option shares were available for
future grants under the GSOP.
The following table summarizes the activity for our fixed option plans
for the last three years. All grants were made at the market price on
the date of grant.
Weighted
Average
Option Exercise
Shares Price
Outstanding Jan. 1, 1999 11,143,892 $ 30.78
Granted 3,531,418 30.16
Exercised (1,578,903) 22.63
Canceled (1,033,435) 39.07
Outstanding Dec. 31, 1999 12,062,972 30.96
Granted 6,539,436 33.94
Exercised (3,372,916) 26.42
Canceled (919,110) 36.41
Outstanding Dec. 31, 2000 14,310,382 33.04
Granted 7,333,445 47.29
Exercised (1,545,214) 31.22
Canceled (1,824,580) 38.56
Outstanding Dec. 31, 2001 18,274,033 $ 38.36
The following table summarizes the options exercisable at the end
of the last three years and the weighted average fair value of options
granted during those years. The fair value of options is estimated
on the date of grant using the Black-Scholes option-pricing model,
with the following weighted average assumptions used for grants
in 2001, 2000 and 1999, respectively: dividend yield of 3.0%, 3.0%
and 2.8%; expected volatility of 46.3%, 41.0% and 23.8%; risk-free
interest rates of 5.0%, 6.5% and 5.3%; and an expected life of
6.8 years, 6.5 years and 6.5 years.
2001 2000 1999
Options exercisable
at year-end 5,982,799 5,751,780 7,940,793
Weighted average fair
value of options granted
during the year $ 19.00 $ 12.96 $ 7.59
The following tables summarize the status of fixed stock options
outstanding and exercisable at Dec. 31, 2001.
Options Outstanding
Weighted
Average Weighted
Remaining Average
Range of Number of Contractual Exercise
Exercise Prices Options Life Price
$ 13.29 – 29.31 3,051,475 5.0 years $ 26.35
29.63 – 35.00 2,742,399 6.8 years 31.02
35.25 3,648,221 8.3 years 35.25
35.31 – 45.10 2,897,707 7.2 years 42.78
45.67 – 48.04 2,038,650 9.7 years 46.17
48.39 – 50.44 3,895,581 9.1 years 48.46
$ 13.29 – 50.44 18,274,033 7.7 years $ 38.36
Options Exercisable
Weighted
Average
Range of Number of Exercise
Exercise Prices Options Price
$ 13.29 – 29.31 2,096,892 $ 25.01
29.63 – 35.00 1,510,667 31.52
35.25 487,266 35.25
35.31 – 45.10 1,868,599 43.02
45.67 – 48.04 ——
48.39 – 50.44 19,375 50.44
$ 13.29 – 50.44 5,982,799 $ 33.20
variable stock option grant
In 1999, we made a variable option grant of 375,000 shares from
our 1994 stock incentive plan to one of our key executives. This was
in addition to 1,966,800 variable option shares granted to executives
prior to 1999. The exercise price of each option was equal to the
market price of our stock on the grant date. One-half of the options
vested when the market price of our stock reached a 20-consecutive-
trading-day average of $50 per share, which occurred in November
2000. The remaining options were to vest when our stock price
reached a 20-consecutive-trading-day average of $55 per share,
which did not occur. Any of these options not exercised prior to
Dec. 1, 2001 expired on that date.
The following table summarizes the activity for our variable option
grants for the last three years.
Weighted
Average
Option Exercise
Shares Price
Outstanding Jan. 1, 1999 1,498,200 $ 30.26
Granted 375,000 29.63
Canceled (152,400) 29.38
Outstanding Dec. 31, 1999 1,720,800 30.20
Exercised (290,975) 30.41
Canceled (437,850) 29.59
Outstanding Dec. 31, 2000 991,975 30.15
Exercised (290,500) 29.74
Canceled (701,475) 30.32
Outstanding Dec. 31, 2001 ——