Home » Travelers Annual Reports » 2008 Annual Report - page 236

Travelers 2008 Annual Report Download - page 236

Download and view the complete annual report

Please find page 236 of the 2008 Travelers annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. SHARE-BASED INCENTIVE COMPENSATION (Continued)

2007 Original Grants Reload Grants

Expected term of stock options ............ 6 - 7 years 1 - 3 years

Expected volatility of the Company’s stock .... 22.5% - 26.9% 14.3% - 19.7%

Weighted average volatility ............... 24.9% 16.5%

Expected annual dividend per share ......... $1.04 - $1.16 $1.04 - $1.16

Risk-free rate ......................... 3.79% - 5.10% 3.34% - 5.06%

2006 Original Grants Reload Grants

Expected term of stock options ............ 5 - 7 years 1 - 4 years

Expected volatility of the Company’s stock .... 22.6% - 32.0% 15.9% - 30.4%

Weighted average volatility ............... 30.3% 18.0%

Expected annual dividend per share ......... $0.92 - $1.04 $0.92 - $1.04

Risk-free rate ......................... 4.30% - 5.10% 4.30% - 5.17%

A summary of stock option activity under the Company’s 2004 Incentive Plan and legacy share-

based incentive compensation plans as of and for the year ended December 31, 2008 is as follows:

Weighted

Weighted Average Aggregate

Average Contractual Intrinsic

Exercise Life Value

Stock Options Number Price Remaining ($ in millions)

Outstanding, beginning of year ........... 34,499,327 $44.33

Granted:

Original ......................... 2,767,362 47.06

Reload .......................... 143,117 49.68

Exercised .......................... (2,543,757) 33.81

Forfeited or expired .................. (2,066,276) 51.04

Outstanding, end of year ............... 32,799,773 $44.97 4.3 years $92

Vested at end of year(1) ............... 27,213,550 $44.97 3.6 years $80

Exercisable at end of year .............. 24,314,011 $44.76 3.1 years $77

(1) Represents awards for which the requisite service has been rendered including those that are

retirement eligible.

The following table presents additional information regarding original and reload grants for the

years ended December 31, 2008, 2007 and 2006.

2008 Original Grants Reload Grants

Weighted average grant-date fair value of options granted

(per share) ..................................... $9.56 $5.80

Total intrinsic value of options exercised during the year

(in millions) ..................................... $33 $ 1

224