Federal Express 2000 Annual Report Download - page 27

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FedEx
Corp.
25
Beginning with the grants made on or after June 1, 1995, the fair value of each option grant was estim ated
on the grant date using the Black-Scholes option-pricing m odel with the following assum ptions for each
option grant:
2000 1999 1998
Dividend yield 0% 0% 0%
Expected volatility 30% 25% 25%
Risk-free interest rate 5.6%–6.8% 4.2% –5.6% 5.4% –6.5%
Expected lives 2.5–9.5 years 2.5–5.5 years 2.5–6.5 years
The following table sum m arizes inform ation about FedEx’s fixed stock option plans for the years ended
M ay 31:
2000 1999 1998
Weighted- Weighted- Weighted-
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
Outstanding at beginning of year 13,399,532 $23.11 13,388,452 $19.74 13,523,460 $17.09
Granted 3,218,450 50.79 3,377,500 31.80 2,485,544 28.20
Exercised (1,232,699) 18.81 (3,135,640) 17.86 (2,336,984) 13.45
Forfeited (374,632) 33.81 (230,780) 26.59 (283,568) 19.51
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Outstanding at end of year 15,010,651 29.12 13,399,532 23.11 13,388,452 19.74
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Exercisable at end of year 5,781,855 21.44 4,404,146 18.57 5,349,626 16.92
The weighted-average fair value of options granted during the year was $16.63, $9.12 and $8.25 for the
years ended May 31, 2000, 1999 and 1998, respectively.
The following table sum m arizes inform ation about fixed stock options outstanding at May 31, 2000:
Options Outstanding Options Exercisable
Weighted- Weighted- Weighted-
Average Average Average
Range of N um ber Rem aining Exercise N um ber Exercise
Exercise Prices Outstanding Contractual Life Price Exercisable Price
$ 8.63–$10.91 281,246 1.2 years $ 9.73 281,246 $ 9.73
12.00–16.50 2,095,522 3.9 years 15.48 1,649,622 15.51
17.50–25.19 4,523,806 5.7 years 20.16 2,139,188 20.65
26.44–37.25 5,068,127 7.7 years 30.61 1,655,299 29.73
38.69–55.94 3,041,950 9.2 years 51.15 56,500 40.07
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8.63–55.94 15,010,651 6.7 years 29.12 5,781,855 21.44
Restricted Stock Plans
Under the term s of FedEx’s Restricted Stock Plans, shares of FedEx’s comm on stock are awarded to key
em ployees. All restrictions on the shares expire over periods varying from two to five years from their date
of award. Shares are valued at the market price of FedEx’s com m on stock at the date of award.
Com pensation related to these plans is recorded as a reduction of com m on stockholders’ investm ent and
is being am ortized to expense as restrictions on such shares expire. The following table sum marizes infor-
m ation about restricted stock awards for the years ended May 31:
2000 1999 1998
Weighted- Weighted- Weighted-
Average Average Average
Shares Fair Value Shares Fair Value Shares Fair Value
Awarded 283,750 $51.90 252,000 $32.71 240,000 $32.99
Forfeited 20,000 37.71 16,900 44.38 28,000 34.94
At May 31, 2000, there were 485,350 shares available for future awards under these plans.