ADP 2000 Annual Report Download - page 30

28
[notes to consolidated financial stat em ents (continued)]
A summary of changes in the stock option plans for the three years ended June 30, 2000 is as follows:
(In thousands, except per share amounts) Number of Options Weighted Average Price
Years ended June 30, 2000 1999 1998 2000 1999 1998
Options outstanding, beginning of year 47,467 45,596 43,176 $24 $18 $15
Options granted 9,646 11,616 11,377 $46 $38 $29
Options exercised (6,736) (6,154) (5,970) $16 $12 $10
Options canceled (3,683) (3,591) (2,987) $32 $24 $18
Options outstanding, end of year 46,694 47,467 45,596 $29 $24 $18
Options exercisable, end of year 18,719 16,898 14,820 $19 $15 $11
Shares available for future grants, end of year 10,478 1,691 9,358
Shares reserved for issuance under stock option plans 57,172 49,158 54,954
Summarized information about stock options outstanding as of June 30, 2000 is as follows:
Outstanding Exercisable
Exercise Remaining Average Average
Price Number of Options Life Exercise Number of Options Exercise
Range (In thousands) (In years) Price (In thousands) Price
Under $15 8,898 2.9 $11 7,820 $11
$15 to $20 6,670 5.3 $18 4,264 $18
$20 to $25 4,786 6.5 $23 1,921 $23
$25 to $30 5,595 7.4 $27 2,021 $27
$30 to $35 2,533 7.9 $32 757 $32
$35 to $40 6,573 8.3 $38 1,277 $38
$40 to $45 8,360 9.1 $44 526 $44
Over $45 3,279 9.7 $51 133 $51
The Company has stock purchase plans under which eligible
employees have the ability to purchase shares of common stock
at 85% of the lower of market value as of the date of purchase
election or as of the end of the plans. Approximately 2.8 million
and 2.6 million shares are scheduled for issuance on December
31, 2001 and 2000, respectively. Approximately 3.1 million and
3.2 million shares were issued during the years ended June 30,
2000 and 1999, respectively. At June 30, 2000 and 1999, there
were approximately 7.2 million and 9.5 million shares, respec-
tively, reserved for purchase under the plans. Included in
liabilities as of June 30, 2000 and 1999 are employee stock
purchase plan withholdings of approximately $86 million and
$72 million, respectively.
The Company follows APB 25 to account for its stock plans.
The pro forma net income impact of options and stock purchase
plan rights granted subsequent to July 1, 1995 is shown below.
The fair value for these instruments was estimated at the date of
grant using a Black-Scholes option pricing model with the fol-
lowing weighted average assumptions:
Years ended June 30, 2000 1999 1998
Risk-free interest rate 6.0-6.7% 4.5-5.7% 5.4-6.3%
Dividend yield .8-.9% 1.0% 1.0%
Volatility factor 22.0-26.7% 19.7-21.8% 13.9-17.4%
Expected life:
Options 6.4 6.3 6.2
Purchase rights 2.0 2.0 2.0
Weighted average fair value:
Options $16.89 $11.63 $ 7.99
Purchase rights $19.73 $12.29 $10.72
The Company’s pro forma information, amortizing the fair
value of the stock options and stock purchase plan rights
issued subsequent to July 1, 1995 over their vesting period,
is as follows:
(In millions, except per share amounts)
Years ended June 30, 2000 1999 1998
Pro forma net earnings $ 762 $ 638 $569
Pro forma basic earnings per share $1.22 $1.04 $ .95
Pro forma diluted earnings per share $1.18 $1.01 $ .92