PNC Bank 2005 Annual Report Download - page 101

101
Information about stock options outstanding at December 31, 2005 follows:
Options Outstanding Options Exercisable
December 31, 2005
Shares in thousands
Range of exercise prices Shares
Weighted-
average exercise
price
Weighted-average remaining
contractual life (in years) Shares
Weighted-average
exercise price
$31.13 – $42.99 1,389 $41.18 4.5 1,389 $41.18
43.00 – 52.99 4,640 46.45 5.6 3,382 46.92
53.00 – 59.99 8,655 55.17 6.6 5,248 56.05
60.00 – 76.00 3,608 72.42 4.7 3,563 72.55
Total 18,292 $55.30 5.8 13,582 $56.58
Options granted in 2005, 2004 and 2003 include options for
30,000 shares that were granted to non-employee directors
in each year.
The weighted-average grant-date fair value of options
granted in 2005, 2004 and 2003 was $8.72, $9.64, and $8.11
per option, respectively. At December 31, 2004 and 2003
options for 12,693,000 and 10,426,000 shares of common
stock, respectively, were exercisable at a weighted-average
price of $56.41 and $55.21, respectively.
There were no options granted in excess of market value in
2005, 2004 or 2003. Shares of common stock available
during the next year for the granting of options and other
awards under the Incentive Plan were 10,584,683 at
December 31, 2005, 2004 and 2003.
As discussed in Note 1 Accounting Policies, we adopted the
fair value recognition provisions of SFAS 123 prospectively
to all employee awards including stock options granted,
modified or settled after January 1, 2003. As permitted
under SFAS 123, we recognize compensation expense for
stock options on a straight-line basis over the pro rata
vesting period. Compensation expense for stock options
recognized in 2005 was $31 million compared with $22
million in 2004 and $12 million in 2003.
INCENTIVE SHARE AND RESTRICTED STOCK AWARDS
In 2003, we granted incentive share awards representing a
maximum of 659,250 shares of PNC common stock to
certain senior executives pursuant to the Incentive Plan.
Issuance of shares pursuant to these incentive awards was
subject to the achievement of one or more financial and
other performance goals over a three-year period that ended
December 31, 2005 and the approval of the Personnel and
Compensation Committee of the Board of Directors. In
February 2006, the Committee approved the issuance of
549,375 shares of common stock to satisfy these incentive
awards. One-half of the shares vested immediately while the
other half were issued as restricted shares with a vesting
period ending December 31, 2006. Expense related to
incentive share awards is recognized over the performance
period and the employee service period.
In 2004, we granted incentive share awards representing a
maximum of 879,000 shares of PNC common stock to
certain senior executives pursuant to the Incentive Plan. In
addition, awards under this grant would be increased by the
amount of phantom dividends on the awards during the
performance period converted to incentive shares and added
to the award amount. Issuance of shares pursuant to these
incentive awards was subject to the achievement of one or
more financial and other performance goals over a two-year
period that ended December 31, 2005 and the approval of
the Personnel and Compensation Committee of the Board of
Directors. Any shares awarded under this grant, other than
those related to the conversion of phantom dividends, would
be reduced on a share-for-share basis for shares issued
pursuant to the 2003 incentive share awards discussed above.
In February 2006, the Committee approved the issuance of
110,812 shares of common stock to satisfy the incentive
awards under this grant. One-half of the shares vested
immediately while the other half were issued as restricted
shares with a vesting period ending December 31, 2006.
In 2000, we granted 245,000 shares of restricted stock to
senior executives with a three-year vesting period. Of these,
35,000 shares were forfeited in 2002. The restricted period for
all but 40,000 of the restricted shares ended November 15,
2003.
In 2002, we granted 109,138 shares of restricted stock to
senior executives with vesting periods ranging from 24
months to 50 months. There were 737 and 1,551 restricted
shares forfeited during 2004 and 2002 respectively. The
restricted period for all but 48,686 shares ended during 2005.
In 2003, we granted 520,446 shares of restricted stock to
senior executives with vesting periods ranging from 24
months to 47 months. There were 8,456, 2,607 and 7,062
restricted shares forfeited in 2005, 2004 and 2003,
respectively.
In 2004, we granted 342,188 shares of restricted stock to
senior executives with vesting periods ranging from 17
months to 43 months. Of these, 3,712 shares were forfeited in
2005 and 1,610 shares were forfeited in 2004. Additionally,
we granted 369,854 shares of restricted stock to certain key
employees. These shares vest 100% after three years. Of these,
26,934 shares were forfeited in 2005 and 11,232 shares were
forfeited in 2004.
In 2005, we granted 440,631 shares of restricted stock to
senior executives with vesting periods ranging from 36
months to 48 months. Of these, 3,245 restricted shares were
forfeited in 2005. Additionally, we granted 339,110 shares of
restricted stock to certain key employees. These shares vest
100% after three years. Of these, 24,635 restricted shares
were forfeited in 2005.
We also granted 37,500, 63,500 and 67,900 shares of restricted
stock to certain key employees in 2005, 2004 and 2003,
respectively. These shares vest 25% after three years, 25% after
four years and 50% after five years. Shares forfeited were
11,500, 11,375 and 10,975 in 2005, 2004 and 2003,
respectively.