US Bank 2002 Annual Report Download - page 94

period. Compensation expense related to the restricted stock conversion terms of the various merger agreements. The
was $18.7 million, $71.9 million and $43.4 million in historical option information presented below has been
2002, 2001, and 2000, respectively. restated to reflect the options originally granted under
Stock incentive plans of acquired companies are acquired companies’ plans.
generally terminated at the merger closing dates. Option At December 31, 2002, there were 36.4 million shares
holders under such plans receive the Company’s common (subject to adjustment for forfeitures) available for grant
stock, or options to buy the Company’s stock, based on the under various plans.
The following is a summary of stock options outstanding and exercised under various stock options plans of the Company:
2002 2001 2000
Weighted-Average Weighted-Average Weighted-Average
Year Ended December 31 Stock Options Exercise Price Stock Options Exercise Price Stock Options Exercise Price
Stock option plans
Number outstanding at beginning
of year************************ 201,610,265 $22.58 153,396,226 $22.80 153,163,030 $22.74
Granted ********************* 29,742,189 21.81 65,144,310 21.25 22,633,170 19.64
Assumed/converted *********** — — 8,669,285 16.40 447,341 6.85
Exercised ******************** (9,594,213) 13.26 (12,775,067) 13.44 (10,017,357) 11.02
Cancelled******************** (15,505,651) 24.18 (12,824,489) 23.29 (12,829,958) 19.91
Number outstanding at end of year** 206,252,590 $22.77 201,610,265 $22.58 153,396,226 $22.80
Exercisable at end of year ******** 123,195,273 $23.63 117,534,343 $22.36 68,870,745 $19.78
Restricted share plans
Number outstanding at beginning
of year************************ 2,177,588 6,377,137 4,212,954
Granted*********************** 806,355 1,021,887 4,110,440
Assumed/converted ************ — 298,988 —
Cancelled/vested ************** (703,886) (5,520,424) (1,946,257)
Number outstanding at end of year** 2,280,057 2,177,588 6,377,137
Weighted-average fair value of
shares granted **************** $ 7.03 $ 6.76 $ 6.32
Additional information regarding options outstanding as of December 31, 2002, is as follows:
Options Outstanding Exercisable Options
Weighted-
Average Weighted- Weighted-
Remaining Average Average
Contractual Exercise Exercise
Range of Exercise Prices Shares Life (Years) Price Shares Price
$.84 — $10.00 ************************************** 5,408,016 1.9 $ 6.19 5,395,464 $ 6.18
$10.01 — $15.00************************************ 6,161,409 4.6 11.84 5,138,594 11.62
$15.01 — $20.00************************************ 45,564,059 7.8 18.73 21,752,900 18.23
$20.01 — $25.00************************************ 87,344,126 8.1 22.49 32,845,987 22.79
$25.01 — $30.00************************************ 54,953,364 6.0 28.17 51,325,867 28.26
$30.01 — $35.00************************************ 6,005,278 5.4 32.56 5,920,123 32.56
$35.01 — $37.20************************************ 816,338 5.5 35.79 816,338 35.79
206,252,590 7.1 $22.77 123,195,273 $23.63
Pro forma information regarding net income and earnings employee stock options have characteristics that are
per share is required under Statement of Financial significantly different from those of traded options,
Accounting Standard No. 123 (‘‘SFAS 123’’), ‘‘Accounting including vesting provisions and trading limitations that
for Stock-Based Compensation’’ and has been determined as impact their liquidity. Because employee stock options have
if the Company accounted for its employee stock option differing characteristics and changes in the subjective input
plans under the fair value method of SFAS 123. The fair assumptions can materially affect the fair value estimate, the
value of options was estimated at the grant date using a Black-Scholes valuation model does not necessarily provide
Black-Scholes option pricing model. Option valuation a reliable measure of the fair value of employee
models require use of highly subjective assumptions. Also, stock options.
92 U.S. Bancorp