Huntington National Bank 2005 Annual Report Download - page 123

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NOTES TOCONSOLIDATED FINANCIAL STATEMENTS HUNTINGTON BANCSHARES INCORPORATED
On January 7, 2005, Huntington released from escrow 86,118 shares of Huntington common stock, which were previously issued
in September 2002, to former shareholders of LeaseNet, Inc. A total of 373,896 common shares, previously held in escrow, was
returned to Huntington. All shares in escrow had been accounted for as treasury stock.
17. STOCK-BASED COMPENSATION
Huntington sponsors nonqualified and incentive stock option plans. These plans provide for the granting of stock options to
officers, directors and other employees at the market price on the date of the grant. Huntington’s board of directors has approved
all of the plans. Shareholders have approved each of the plans, except for the broad-based Employee Stock Incentive Plan. Of the
26.5 million options to purchase shares of common stock authorized for issuance under the plans at December 31, 2005,
21.0 million are outstanding and 5.5 million were available for future grants. Options granted since 1997 vest ratably over three
years or when other conditions are met while those granted in 1994 through 1997 vested ratably over four years. Options granted
prior to May 2004 have a maximum term of ten years. All options granted beginning in May 2004 have a maximum term of
seven years.
The fair value of the options granted was estimated at the date of grant using a Black-Scholes option-pricing model. Huntington’s
stock option activity and related information for each of the recent three years ended December 31 was as follows:
2005 2004 2003
Weighted- Weighted- Weighted-
Average Average Average
Exercise Exercise Exercise
(in thousands, except per share amounts) Options Price Options Price Options Price
Outstanding at beginning of year 20,017 $20.25 19,997 $19.40 18,024 $18.93
Granted 3,645 24.32 3,200 23.05 3,659 20.38
Exercised (1,842) 17.89 (2,478) 17.05 (788) 14.40
Forfeited/expired (816) 21.70 (702) 20.02 (898) 19.32
Outstanding at end of year 21,004 $21.11 20,017 $20.25 19,997 $19.40
Exercisable at end of year 13,048 $20.13 11,984 $19.68 9,649 $19.60
Weighted-average fair value per share of options granted during the year $ 5.28 $ 5.78 $ 5.64
Additional information regarding options outstanding as of December 31, 2005, was as follows:
Options Outstanding Exercisable Options
Weighted-
Average Weighted- Weighted-
Remaining Average Average
Contractual Exercise Exercise
(in thousands, except per share amounts) Shares Life (Years) Price Shares Price
Range of Exercise Prices
$11.09 to $15.00 968 3.8 $14.84 968 $14.84
$15.01 to $20.00 8,017 5.5 18.14 6,540 17.73
$20.01 to $25.00 9,731 6.4 22.74 3,270 21.55
$25.01 to $28.35 2,288 3.1 27.22 2,270 27.24
Total 21,004 5.6 $21.11 13,048 $20.13
On August 27, 2002, common stock options were granted, with certain specified exceptions, to full- and part-time employees
under the Huntington Bancshares Incorporated Employee Stock Incentive Plan (the Incentive Plan). Under the terms of the
Incentive Plan, these options are to vest on the earlier of August 27, 2007, or at such time as the closing price for Huntington’s
common stock for five consecutive trading days reached or exceeded $27.00. As of December 31, 2005, 1.5 million shares under
option remain unvested.
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