Lowe's 2003 Annual Report Download - page 38

36 LOWE’S COMPANIES, INC.
Stock option information related to the 2001, 1997 and 1994
Incentive Plans is summarized as follows:
Key Employee Stock Option Plans
Shares Weighted-Average
(In Thousands) Exercise Price Per Share
Outstanding at February 2, 2001 15,508 $19.43
Granted 10,866 34.17
Canceled or Expired (1,611) 25.50
Exercised (5,622) 14.99
Outstanding at February 1, 2002 19,141 $28.77
Granted 5,537 43.65
Canceled or Expired (1,085) 34.28
Exercised (2,942) 22.20
Outstanding at January 31, 2003 20,651 $33.37
Granted 4,868 40.27
Canceled or Expired (1,129) 39.66
Exercised (3,745) 26.20
Outstanding at January 30, 2004 20,645 $35.78
Exercisable at January 30, 2004 7,525 $27.58
Exercisable at January 31, 2003 7,770 $23.75
Exercisable at February 1, 2002 6,707 $21.67
Outstanding Exercisable
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– –––––––––––––––––––––––––––––––––––––––––––––––––––
Weig hted- Weig hted- Weig hted-
Range of Average Average Average
Exercise Options Remaining Exercise Options Exercise
Prices (In Thousands) Term Price (In Thousands) Price
$ 5.18 - $ 7.52 72 1.6 $ 5.92 72 $ 5.92
8.70 - 12.60 21 2.4 11.16 21 11.16
13.19 - 19.44 187 3.6 14.92 187 14.92
21.34 - 31.16 7,701 6.4 25.49 5,946 24.90
32.04 - 47.00 12,663 8.3 42.55 1,299 43.15
$58.93 1 9.8 58.93 – –
Totals 20,645 7.5 $ 35.78 7,525 $ 27.58
In 1999, the Company’s shareholders approved the Lowe’s
Companies, Inc. Directors’ Stock Option Plan, which replaced the
Directors’ Stock Incentive Plan that expired on May 29, 1998.
During the term of the Plan, each non-employee Director will be
awarded 4,000 options on the date of the first board meeting after
each annual meeting of the Company’s shareholders (the award
date). The maximum number of shares available for grant under
the Plan is 500,000, subject to adjustment. No awards may be
granted under the Plan after the award date in 2008. The options
vest evenly over three years, expire after seven years and are
assigned a price equal to the fair market value of the Company’s
common stock on the date of grant.
Stock option information related to the Directors’ Stock Option
Plan is summarized as follows:
Directors’ Stock Option Plans
Shares Weighted-Average
(In Thousands) Exercise Price Per Share
Outstanding at February 2, 2001 60 $24.27
Granted 40 35.91
Outstanding at February 1, 2002 100 $28.92
Granted 40 47.16
Exercised (4) 25.85
Outstanding at January 31, 2003 136 $34.38
Granted 36 42.26
Exercised (25) 28.74
Canceled or Expired (12) 43.03
Outstanding at January 30, 2004 135 $36.77
Exercisable at January 30, 2004 71 $31.28
Exercisable at January 31, 2003 59 $27.06
Exercisable at February 1, 2002 29 $24.77
During 2000, the Company established a qualified Employee
Stock Purchase Plan that allows eligible employees to participate in
the purchase of designated shares of the Company’s common
stock. Ten million shares were authorized for this plan with
4,653,731 remaining available at January 30, 2004. The purchase
price of this stock is equal to 85% of the lower of the closing price
at the beginning or the end of each semi-annual stock purchase
period. The Company issued 1,441,518, 1,341,241, and 1,688,966
shares of common stock pursuant to this plan during 2003, 2002,
and 2001, respectively. As noted in Note 1, effective February 1,
2003, the Company adopted the fair-value recognition provisions
of SFAS No. 123 for all employee awards granted or modified after
January 31, 2003. As a result, during 2003, the Company recog-
nized compensation expense totaling $13 million relating to stock
issued under the Employee Stock Purchase Plan during that period,
which is included in the $41 million in compensation expense rec-
ognized in 2003. No compensation expense was recorded in 2002
or 2001 related to the Employee Stock Purchase Plan, as the Plan
qualified as non-compensatory under the intrinsic value method
of accounting.
The Company reports comprehensive income in its consolidat-
ed statement of shareholders’ equity. Comprehensive income rep-
resents changes in shareholders’ equity from non-owner sources.
For the three years ended January 30, 2004, unrealized holding
gains/losses on available-for-sale securities were the only items of
other comprehensive income for the Company and were immate-
rial. The reclassification adjustments for gains/losses included in
net earnings for 2003, 2002, and 2001 were also immaterial.