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100 being focused: being better
Stock Option Program 2001
Under the terms of the Stock Option Program (SOP) 2001 proposed on July 10, 2001 and
subsequently approved by the Supervisory Board on October 25, 2001, the Executive Board is
authorized to grant eligible employees up to 4,268,500 non-transferable options to acquire
Company shares. Of the 116 employees potentially eligible, 65 senior executives took part in
SOP 2001. The reference price is 7.45 euros. The exercise price lies between 8.20 and
9.31 euros, with a weighted average exercise price of 8.76 euros.
2002 2001
Stock options Stock options
in thousands in thousands
Outstanding at beginning of year 1,257 0
Granted 0 1,257
Exercised 0 0
Expired 177 0
Outstanding at year-end 1,080 1,257
Exercisable at year-end 0 0
Stock Option Program 2002 (continuation of SOP 2001)
Following on from the Stock Option Program proposed in 2001 and adopted on July 10, 2001,
the Stock Option Program 2002 was confirmed on September 10, 2002 by the Executive
Board, and on September 20, 2002 by the Working Committee of the Supervisory Board.
Under the terms of SOP 2002, the Executive Board is authorized until June 30, 2006 to grant
eligible employees remaining unassigned non-transferable options on company stock. The
reference price is 4.67 euros. The exercise price lies between 5.14 euros and 5.84 euros, with
a weighted average exercise price of 5.49 euros. In 2002 no options were granted from
SOP 2002 as the time limit for eligibility had not expired as of balance sheet date.
The Company records subscription rights in accordance with Statement of Financial
Accounting Standards No. 123, Accounting for Stock Based Compensation (SFAS 123), using
the intrinsic value method from APB Opinion No. 25, Accounting for Stock Issued to Employees
(APB 25). All options were issued at an exercise price in excess of the market price at the date
of issue. Under this arrangement, the Company charged no personnel expenses in connection
with the subscription rights granted.
In order to comply with SFAS No. 123, adjusted pro-forma information on the Consolidated
Financial Statments must be shown as if the Company had accounted for employee
subscription rights using the fair value method. The fair value of subscription rights granted for
fiscal years 2001 and 2002 was estimated based on weighted averages at the time of granting
the options using the Black-Scholes Method which was modified as follows: risk-free interest
rate of 4.7 percent for 2001; volatility of 42 percent for 2001, expected dividend yield at time