Lowe's 2001 Annual Report Download - page 37

Lo we’s Co mpanies, Inc.
35
Key Employee Stock Option Plans
Shares Weighted-Average
( In Tho usands) Exercise Price Per Share
Outstanding at January 29, 1999 11,488 $13.35
Granted 2,288 $24.97
Canceled o r Expired ( 1,240) $21.38
Exercised ( 1 ,4 70) $ 10. 73
Outstanding at January 28, 2000 11,066 $16.18
Granted 7,370 $23.39
Canceled o r Expired ( 1,672) $23.33
Exercised ( 1,256) $10.03
Outstanding at February 2, 2001 15,508 $19.43
Granted 10,866 $34.17
Canceled o r Expired ( 1,611) $25.50
Exercised ( 5,622) $14.99
Outstanding at February 1, 2002 19,141 $28.77
Exercisable at February 1, 2002 6,707 $21.67
Exercisable at February 2, 2001 9,422 $16.94
Exercisable at January 28, 2000 6,540 $12.81
Outstanding Exercisable
––– ––– – ––– – ––– – ––– ––– – ––– – ––– –––– ––– – ––– – ––– –––– ––– – ––– – ––– –––– ––– – ––– – ––– – –––– ––– – ––– – ––– –––– ––– – ––– – ––– ––– – ––– – ––– – ––– ––– – ––– – ––– –
Weig hted- Weighted- Weig hted-
Range of Average Average Average
Exercise Optio ns Remaining Exercise Optio ns Exercise
Prices ( In Tho usands) Term Price ( In Tho usands) Price
$ 5.18 - $ 7.52 117 3.2 $ 5.98 117 $ 5.98
8. 70 - 12.90 524 2. 9 11.65 524 11.65
13.19 - 19.73 292 5.1 15. 28 292 15.28
20.71 - 30.66 14,050 5.3 25. 13 5,774 23.21
$31.16 - $ 45.70 4,158 7.0 44.85 ––
Totals 19,141 5.5 $ 28.77 6,707 $ 21.67
Restricted sto ck awards of 20,000, and 1,741,400 shares, with
per share weighted- average fair values of $17.57, and $12.40, were
granted to c ertain executives in 1998 and 1997, respectively. No
restricted sto ck awards were granted in 2001, 2000, and 1999.
These shares were no ntransferable and subject to fo rfeiture fo r
perio ds prescribed by the Co mpany. During 2001, a to tal o f 31,800
shares were fo rfeited and 312,600 shares vested. At February 1,
2002, all restricted sto ck awards were fully vested. Related expens-
es ( charged to c o mpensatio n expense) fo r 2001, 2000 and 1999
were $1.9, $7.3, and $12.5 million, respectively.
In 1999, the Co mpany’s shareho lders appro ved the Lo we’s
Co mpanies, Inc. Directo rs’ Sto ck Optio n Plan, which replaced the
Dire cto rs’ Sto ck Incentive Plan that expired o n May 29, 1998.
During the term of the Plan, each no n-emplo yee Directo r will be
awarded 4,000 o ptio ns o n the date of the first bo ard meeting after
each annual meeting o f the Co mpany’s shareho lders ( the award
date) . The maximum number o f shares available fo r grant under the
Plan is 500,000, subjec t to adjustment. No awards may be grant-
ed under the Plan after the award date in 2008. The o ptio ns vest
evenly o ver three years, expire after seven years and are assigned
a price equal to the fair market value of the Co mpany’s co mmon
sto ck o n the date o f grant. During 2001, 40,000 shares were grant-
ed at a price o f $35.91 per share; these shares remain o utstanding
at February 1, 2002. During 2000, 32,000 shares were granted at
a price o f $22.88 per share and remain o utstanding at February 1,
2002. At February 1, 2002, a to tal o f 10,672 o ptio ns are exercis-
able fro m the 2000 grant. During 1999, 36,000 shares were grant-
ed under the Plan at a price of $25.84 per share, of which 28,000
remain o utstanding at February 1, 2002. During 2001, 8,000 shares
were canceled under the Plan. At February 1, 2002, a to tal of
18,669 shares are exercisable under the 1999 grant.
During 2000, the Co mpany established a qualified Emplo yee
Sto ck Purchase Plan that allo ws eligible emplo yees to participate
in the purchase o f designated shares o f the Co mpany’s co mmo n
sto ck. Ten millio n shares were autho rized fo r this plan with
7,436,586 remaining available at February 1, 2002. The purchase
price o f this sto ck is equal to 85% of the lo wer of the clo sing price
at the beginning o r the end of each semi- annual sto ck purchase
perio d. The Co mpany issued 1,688, 966 and 874,448 shares o f c o m-
mo n sto ck pursuant to this plan during 2001 and 2000, respec-
tively. No c o mpensatio n expense has been reco rded in the acco m-
panying c o nso lidated statements o f earnings related to this Plan
as the Plan qualifies as no n-co mpensato ry.
The Co mpany applies the intrinsic value metho d of acco unting
fo r its sto ck-based co mpensation plans. Acco rdingly, no co mpen-
satio n expense has been reco gnized fo r sto c k-based co mpensatio n
where the o ptio n price o f the sto ck appro ximated the fair market
value o f the sto ck o n the date o f grant, o ther than fo r restricted
sto ck grants. Had co mpensatio n expense fo r 2001, 2000, and 1999
sto ck o ptio ns granted been determined using the fair value
metho d, the Co mpany’s net earnings and earning s per share ( EPS)
amo unts wo uld approximate the fo llo wing pro fo rma amo unts ( in
tho usands, exc ept per share data) :
2001 2000 1999
––– ––– – ––– – ––– – ––– ––– – ––– – ––– –––– ––– – ––– – ––– – – – ––– – ––– –––– ––– – ––– – ––– ––– – ––– – ––– – ––– ––– – ––– – – ––– – ––– ––– – ––– – ––– –––– ––– – ––– – ––– – ––– –––– –––
As Pro As Pro As Pro
Re po rted Fo rma Repo rte d Fo rma Repo rted Fo rma
Net Earnings $1,023,262 $ 968, 181 $ 809,871 $ 773,430 $672,795 $652, 786
Basic EPS $ 1.33 $ 1.25 $ 1.06 $ 1.01 $ 0.88 $ 0. 86
Diluted EPS $ 1. 30 $ 1.22 $ 1.05 $ 1.01 $ 0.88 $ 0.85