American Express 2002 Annual Report Download - page 78

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I76 AXP INOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes information about the stock options outstanding at December 31, 2002:
(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
$ 8.26 – $29.99 31,026 4.1 $ 24.21 27,792 $ 23.84
$ 30.00 – $35.99 23,191 6.4 $ 35.20 14,774 $ 35.25
$ 36.00 – $42.99 42,351 8.9 $ 37.10 4,028 $ 40.36
$ 43.00 – $43.99 29,507 7.2 $ 43.66 10,849 $ 43.66
$ 44.00 – $61.44 40,157 7.8 $ 45.15 4,460 $ 48.12
$ 8.26 – $61.44 166,232 7.1 $ 37.54 61,903 $ 32.86
The company granted 0.3 million, 3.0 million and 1.5 million restricted stock awards (RSAs) with a weighted average grant
date value of $35.97, $35.48 and $43.46 per share for 2002, 2001 and 2000, respectively. Restrictions generally expire four
years from date of grant. The compensation cost charged against income for the company’s RSAs was $40 million, $36 million
and $41 million for 2002, 2001 and 2000, respectively.
Note 15 RETIREMENT PLANS
Pension Plans
The company sponsors the American Express Retirement Plan (the Plan), a noncontributory defined benefit plan which is a
qualified 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 currently 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. Each pay period these balances are credited with an amount equal to a percentage, determined
by an employee’s age plus service, of base pay (which includes, but is not limited to regular earnings, incentive pay, shift differ-
ential, overtime, certain commissions, and transition pay). 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 previ-
ous October 1 through November 30. Employees have the option to receive annuity payments or a lump sum payout at vested
termination 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.