Coca Cola 2003 Annual Report Download - page 86

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Coca-Cola Company and Subsidiaries
NOTE 13: RESTRICTED STOCK, STOCK OPTIONS AND OTHER STOCK PLANS (Continued)
Options to purchase common stock under the 2002 Option Plan have been granted to Company employees at
fair market value at the date of grant.
Stock options granted in December 2003 generally become exercisable over a four-year graded vesting
period and expire 10 years from the date of grant. Stock option grants from 1999 through July 2003 generally
become exercisable over a four-year graded vesting period and expire 15 years from the date of grant. Prior to
1999, stock options generally became exercisable over a three-year vesting period and expired 10 years from the
date of grant.
To ensure the best market-based assumptions were used to determine the estimated fair value of stock
options granted in 2003 and 2002, we obtained two independent market quotes. Our Black-Scholes value was
not materially different from the independent quotes.
The following table sets forth information about the fair value of each option grant on the date of grant
using the Black-Scholes option-pricing model and the weighted-average assumptions used for such grants:
2003 2002 2001
Weighted-average fair value of options granted $ 13.49 $ 13.10 $ 15.09
Dividend yields 1.9% 1.7% 1.6%
Expected volatility 28.1% 30.2% 31.9%
Risk-free interest rates 3.5% 3.4% 5.1%
Expected lives 6 years 6 years 5 years
A summary of stock option activity under all plans is as follows (shares in millions):
2003 2002 2001
Weighted- Weighted- Weighted-
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
Outstanding on January 1, 159 $ 50.24 141 $ 51.16 112 $ 51.23
Granted124 49.67 29 44.69 45 48.11
Exercised (4) 26.96 (3) 31.09 (7) 24.30
Forfeited/Expired2(12) 51.45 (8) 54.21 (9) 56.74
Outstanding on December 31, 167 $ 50.56 159 $ 50.24 141 $ 51.16
Exercisable on December 31, 102 $ 51.97 80 $ 51.72 65 $ 50.83
Shares available on December 31, for
options that may be granted 108 122 25
1No grants were made from the 1991 Option Plan during 2003, 2002 or 2001.
2Shares forfeited/expired relate to the 1991, 1999 and 2002 Option Plans.
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