American Express 2003 Annual Report Download - page 101

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The following table summarizes information about the stock options outstanding at December 31, 2003:
(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 22,710 3.2 $ 24.79 21,444 $ 24.50
$30.00 – $35.99 29,371 6.6 $ 34.56 18,518 $ 35.23
$36.00 – $42.99 39,357 7.7 $ 37.13 14,858 $ 37.66
$43.00 – $43.99 26,804 6.1 $ 43.66 18,445 $ 43.66
$44.00 – $61.44 37,591 6.7 $ 45.19 14,998 $ 45.72
$8.26 – $61.44 155,833 6.3 $ 37.92 88,263 $ 36.58
The Company granted 5.3 million, 0.3 million and 3.0 million restricted stock awards (RSAs) with a weighted average grant
date value of $33.88, $35.97 and $35.48 per share for 2003, 2002 and 2001, respectively. RSAs granted in 2003 generally
vest ratably at 25 percent per year beginning with the first anniversary of the grant date. RSAs granted prior to 2003 gen-
erally vest four years from date of grant. The compensation cost charged against income for the Company’s RSAs was $85
million, $40 million and $36 million for 2003, 2002 and 2001, 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 applica-
ble 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 compensation as defined by the Plan (which includes, but
is not limited to, base pay, certain incentive pay and commissions, shift differential, overtime and transition pay). Employ-
ees’ 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 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 pay-
ments at the time of retirement or termination under applicable labor laws or agreements.
Plan assets consist principally of equities and fixed income securities.
The Company measures the obligations and related asset values for its pension and other postretirement benefit plans as of
September 30th.
(p.99_axp_ notes to consolidated financial statements)