American Express 2001 Annual Report Download - page 70

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes information about the stock options outstanding at December 31, 2001:
(Shares in thousands) Options Outstanding Options Exercisable
Weighted
Average Weighted Weighted
Number Remaining Average Number Average
Range of Exercise Prices Outstanding Contractual Life Exercise Price Exercisable Exercise Price
$ 6.25– $28.99 19,202 4.5 $ 18.91 16,365 $ 17.53
$29.00 – $34.99 19,157 6.2 $ 29.51 15,897 $ 29.48
$35.00– $41.99 30,855 7.2 $ 36.24 11,776 $ 36.64
$42.00–$43.99 33,142 8.2 $ 43.66 1,574 $ 43.58
$44.00–$61.44 43,713 8.8 $ 45.13 3,816 $ 47.64
$ 6.25– $61.44 146,069 7.4 $ 37.42 49,428 $ 29.08
Note 15 ❚RETIREMENT PLANS
PENSION PLANS
The company sponsors the American Express Retirement Plan (the Plan), a noncontributory defined benefit plan which is a qual-
ified plan under the Employee Retirement Income Security Act of 1974, as amended (ERISA), under which the cost of retirement
benefits for eligible employees in the United States is measured by length of service, compensation and other factors and is cur-
rently being funded through a trust. Funding of retirement costs for the Plan complies with the applicable minimum funding
requirements specified by ERISA. Employees’accrued benefits are based on recordkeeping account balances which are maintained
for each individual and are credited with additions equal to a percentage, based on age plus service, of base pay, certain commis-
sions and bonuses, overtime and shift differential, each pay period. Employees’ balances are also credited daily with a fixed rate of
interest that is updated each January 1 and is based on the average of the daily five-year U.S. Treasury Note yields for the previous
October 1 through November 30. Employees have the option to receive annuity payments or a lump sum payout at vested termi-
nation or retirement.
In addition, the company sponsors an unfunded non-qualified Supplemental Retirement Plan (the SRP) for certain highly
compensated employees to replace the benefit that cannot be provided by the Plan. The SRP generally parallels the Plan but offers
different payment options.
Most employees outside the United States are covered by local retirement plans, some of which are funded, or receive payments
at the time of retirement or termination under applicable labor laws or agreements.
Plan assets consist principally of equities and fixed income securities.
The components of the net pension cost for all defined benefit plans accounted for under SFAS No. 87,“Employers’Accounting for
Pensions,” are as follows:
(Millions) 2001 2000 1999
Service cost $ 102 $ 95 $ 89
Interest cost 106 98 88
Expected return on plan assets (122) (102) (93)
Amortization of:
Prior service cost (10) (9) (9)
Transition obligation (1)31
Reversion gain
—
(4) (4)
Recognized net actuarial (gain) loss (1) 57
Settlement/Curtailment gain (1) (22) (16)
Net periodic pension benefit cost $73 $ 64 $ 63