Comerica 2009 Annual Report Download - page 123

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries
provided for a grant of up to 13.2 million common shares, plus shares under certain plans that are forfeited,
expire or are cancelled. At December 31, 2009, 7.0 million shares were available for grant.
The Corporation used a binomial model to value stock options granted in the periods presented. Option
valuation models require several inputs, including the expected stock price volatility, and changes in input
assumptions can materially affect the fair value estimates. The model used may not necessarily provide a reliable
single measure of the fair value of employee and director stock options. The risk-free interest rate assumption
used in the binomial option-pricing model as outlined in the table below was based on the federal ten-year
treasury interest rate. The expected dividend yield was based on the historical and projected dividend yield
patterns of the Corporation’s common shares. Expected volatility assumptions considered both the historical
volatility of the Corporation’s common stock over a ten-year period and implied volatility based on actively
traded options on the Corporation’s common stock with pricing terms and trade dates similar to the stock
options granted.
The estimated weighted-average grant-date fair value per option share and the underlying binomial option-
pricing model assumptions are summarized in the following table:
2009 2008 2007
Weighted-average grant-date fair value per option share ................... $6.55 $9.54 $12.47
Weighted-average assumptions:
Risk-free interest rates ........................................ 3.08% 3.73% 4.88%
Expected dividend yield ....................................... 4.62 4.62 3.85
Expected volatility factors of the market price of Comerica common stock .... 58 34 23
Expected option life (in years) ................................... 6.4 6.6 6.4
A summary of the Corporation’s stock option activity and related information for the year ended
December 31, 2009 follows:
Weighted-Average
Remaining Aggregate
Number of Exercise Contractual Intrinsic
Options Price Term Value
(in thousands) per Share (in years) (in millions)
Outstanding — January 1, 2009 .................. 19,234 $53.51
Granted ................................. 1,535 17.36
Forfeited or expired ........................ (2,347) 61.18
Exercised ................................ ——
Outstanding — December 31, 2009 ............... 18,422 49.52 4.9 $18
Outstanding, net of expected forfeitures —
December 31, 2009 ......................... 18,253 49.70 4.9 17
Exercisable — December 31, 2009 ................ 13,927 53.17 4.0 —
The aggregate intrinsic value of outstanding options shown in the table above represents the total pretax
intrinsic value at December 31, 2009, based on the Corporation’s closing stock price of $29.57 at December 31,
2009.
There were no stock options exercised during 2009. The total intrinsic value of stock options exercised was
less than $0.5 million and $33 million for the years ended December 31, 2008 and 2007, respectively. Cash
received from the exercise of stock options during 2008 and 2007 totaled $1 million and $89 million,
respectively. The net excess income tax benefit realized for the tax deductions from the exercise of these options
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