Southwest Airlines 1998 Annual Report Download - page 56

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56
SOUTHWEST AIRLINES CO. ¤ SIX STORIES OF FREEDOM
The following table summarizes information about stock options outstanding under
the six fixed option plans at December 31, 1998:
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
RANGE OF
EXERCISE PRICES
NUMBER
OUTSTANDING
AT 12/31/98
WEIGHTED-
AVERAGE
REMAINING
CONTRACTUAL
LIFE
WEIGHTED-
AVERAGE
EXERCISE
PRICE
NUMBER
EXERCISABLE
AT 12/31/98
WEIGHTED-
AVERAGE
EXERCISE
PRICE
$2.68 to $3.47 3,307,850 2.03 yrs $2.74 1,195,748 $2.86
$5.04 to $7.50 485,476 3.07 5.35 141,557 5.36
$8.36 to $10.83 32,844,404 7.85 8.97 12,009,216 8.94
$11.19 to $16.64 5,061,066 6.85 12.23 1,472,115 12.99
$17.71 to $19.62 4,447,014 9.59 18.37 585,230 18.57
$2.68 to $19.62 46,145,810 7.44 yrs $9.75 15,403,866 $9.19
The Company has granted options to purchase the Company’s common stock related
to employment contracts with the Company’s president and chief executive officer.
Depending upon the grant, these options have terms of ten years from the date of grant
or ten years from the date exercisable and vest and become fully exercisable over
three or four years. No options were granted in 1998 or 1997. In 1996, the Company
granted 325,000 options with an exercise price of $1.00 per share and 1,125,000
options with an exercise price of $10.44 per share related to the 1996 employment
agreement. At December 31, 1998, 1997, and 1996, total options of 3,688,000,
3,916,000, and 4,270,000 were outstanding, respectively. At December 31, 1998, total
options of 3,108,000 were exercisable at exercise prices ranging from $1.00 to $10.44
per share. Options for 228,000, 354,000, and 379,500 shares were exercised in 1998,
1997, and 1996, respectively.
Under the 1991 Employee Stock Purchase Plan (ESPP), at December 31, 1998, the
Company is authorized to issue up to a balance of 855,000 shares of common stock to
Employees of the Company at a price equal to 90 percent of the market value at the
end of each purchase period. Common stock purchases are paid for through periodic
payroll deductions. Participants under the plan received 451,000 shares in 1998,
660,000 shares in 1997, and 696,000 shares in 1996 at average prices of $17.45,
$10.67, and $10.25, respectively.