Chesapeake Energy 1999 Annual Report Download - page 65

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subjective input assumptions can materially affect the fair value estimate, in management's opinion the existing
models do not necessarily provide a reliable single measure of the fair value of its employee stock options.
The Company's pro forma information follows:
For purposes of the pro forma disclosures, the estimated fair value of the options is amortized to expense over the
options' vesting period, which is four years. Because the Company's stock options vest over four years and
additional awards are typically made each year, the above pro forma disclosures are not likely to be representative of
the effects on pro forma net income for future years. A summary of the Company's stock option activity and related
information follows:
Year Ended June 30,
1997 Weighted-Avg
Options Exercise Price
Outstanding Beginning of Year 7,602,884 S4.66
Granted 3,564,884 19.35
Exercised (1,197,998) 1.95
Cancelled/Forfeited (2.066,l 11) 22.26
Outstanding End of Year 7 903 659 $7.09
Exercisable End of Year 3 323 824
Shares Authorized for Future Grants 5 212 056
Fair Value of Options Granted During the Year $7.51
The following table summarizes information about stock options outstanding at December 31, 1999:
-55-
Range of
Exercise Prices
Options Outstanding Options Exercisable
Number
Outstanding
(1i 12/31/99
Weighted-Avg.
Remaining
Contractual Life
Number
Weighted-Avg. Exercisable Weighted-Avg.
Exercise Price @ 12/31/99 Exercise Price
$0.08 $0.78 897,982 4.02 $0.62 897,982 $0.62
$0.94 - $0.94 2,538,000 9.04 0.94 42,500 0.94
$1.00 -$1.00 31,250 9.01 1.00 31,250 1.00
$1.13 -$1.13 6,679,130 8.68 1.13 1,627,898 1.13
$1.33 -$2.25 1,320,204 4.34 2.00 1,320,204 2.00
$2.38 -$10.69 1,263,300 6.74 4.75 1,005,405 4.97
$14.25 -$14.25 27,000 7.32 14.25 13,500 14.25
$17.67 -$17.67 938 0.08 17.67 938 17.67
$25.88 -$25.88 625 0.08 25.88 625 25.88
$30.63 -$30.63 100.000 6.77 30.63 100.000 30.63
$0.08 -$30.63 12.858.429 7.77 $1.76 5.040,3j32 $2.66
Years Ended December 31. Six Months Ended December 31,
1997
1999 1998
Options Weighted-Avg
Exercise Price Options Weighted-Avg
Exercise Price Weighted-Avg
Options Exercise Price
Outstanding Beginning of Period 11,260,375 $1.86 8,330,381 $5.49 7,903,659 $7.09
Granted 3,210,493 1.11 14,580,063 2.78 3,362,207 8.29
Exercised (622,120) 0.99 (108,761) 1.35 (219,349) 3.13
Cancelled/Forfeited (990.319) 1.87 (11.541.308) 5.64 (2.716.136) 13.87
OutstandingEndofPeriod 12.858.429 S1.76 11.260,375 $1.86 8,330.381 $5.49
Exercisable End of Period 5,040.302 3.535,126 3,838,869
Shares Authorized for Future Grants 2.560.687 1.761.359 4,585.973
Fair value of Options Granted During the Period. $0.77 $2.34 $4.98
Years Ended
December 31, Six Months Ended
December 31,
1997
Year Ended
June 30,
1997
1999 1998
(In thousands, except per share amounts)
Net Income (Loss)
As reported $33,266 $ (933,854) $(31,574) $ (183,377)
Pro forma 24,802 (948,014) (35,084) (190,160)
Basic Earnings (Loss) per Share
As reported $0.17 S(9.97) $(0.45) $(2.79)
Pro forma 0.08 (10.12) (0.50) (2.89)
Diluted Earnings (Loss) per Share
As reported $0.16 $(9.97) $(0.45) $(2.79)
Pro forma 0.08 (10.12) (0.50) (2.89)