Travelers 2005 Annual Report Download - page 198

THE ST. PAUL TRAVELERS COMPANIES, INC.AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
186
13. INCENTIVE PLANS (Continued)
compensation plans. These stock options retained the same terms and conditions that were applicable
prior to the merger. Under the SPC stock option programs, stock option awards were granted having a ten
year term with an exercise price equal to the fair value of the Company’s common stock on the date of
grant. Generally, options vest 25% each year over a four-year period. Certain stock option awards granted
under the SPC 1994 Stock Plan between February 2002 and November 10, 2003 permitted an employee
exercising an option to be granted a new option (areload option) in an amount equal to the number of
shares of the Company common stock used to satisfy the exercise price due upon exercise of an option.
The reload options are granted at an exercise price equal to the fair market value of the Company common
stock on the date of grant, vest one year after the grant date and are exercisable for the remaining term of
the related original option.
Information with respect to stock option activity under the Company’s stock option plans for the years
ended December 31, 2005, 2004 and 2003 is as follows:
2005 2004 2003
Options
Weighted
Average
Exercise
Price Options
Weighted
Average
Exercise
Price Options
Weighted
Average
Exercise
Price
Outstanding, beginning of
year.................... 47,844,259 $ 41.24 30,422,539 $ 41.19 32,988,349 $ 40.68
Granted:
Original:
Newly granted......... 4,416,098 37.191,327,575 41.67198,269 37.31
Converted(1) .......... ——350,188 62.79 ——
Reload.................. 544,931 42.54 553,583 39.21 477,121 36.48
Assumed/Replacement... — —23,049,803 39.50 — —
Exercised................. (5,591,403) 29.62 (4,420,171) 28.53 (1,721,435 ) 23.42
Forfeited .................. (3,348,976) 46.65 (3,439,258) 44.09 (1,519,765 ) 48.11
Outstanding, end of year.... 43,864,909 $ 41.81 47,844,259 $ 41.24 30,422,539 $ 41.19
(1) Represents the conversion of the outstanding stock options to purchase CIRI stock into options to
purchase the Company’s common stock.