Ameriprise 2015 Annual Report Download - page 171

As of December 31, 2015, there was $99 million of total unrecognized compensation cost related to non-vested awards
under the Company’s share-based compensation plans, which is expected to be recognized over a weighted-average period
of 2.4 years.
Amended and Restated Ameriprise Financial 2005 Incentive Compensation Plan
The 2005 ICP, which was amended and approved by shareholders on April 30, 2014, provides for the grant of cash and
equity incentive awards to directors, employees and independent contractors, including stock options, restricted stock
awards, restricted stock units, stock appreciation rights, performance shares and similar awards designed to comply with
the applicable federal regulations and laws of jurisdiction. Under the 2005 ICP, a maximum of 54.4 million shares may be
issued. Of this total, no more than 4.5 million shares may be issued after April 30, 2014 for full value awards, which are
awards other than stock options and stock appreciation rights. Shares issued under the 2005 ICP may be authorized and
unissued shares or treasury shares.
Ameriprise Financial 2008 Employment Incentive Equity Award Plan
The 2008 Plan is designed to align employees’ interests with those of the shareholders of the Company and attract and
retain new employees. The 2008 Plan provides for the grant of equity incentive awards to new employees, primarily those,
who became employees in connection with a merger or acquisition, including stock options, restricted stock awards,
restricted stock units, and other equity-based awards designed to comply with the applicable federal and foreign
regulations and laws of jurisdiction. Under the 2008 Plan, a maximum of 6.0 million shares may be issued.
Stock Options
Stock options granted under the 2005 ICP and the 2008 Plan have an exercise price not less than 100% of the current
fair market value of a share of the Company’s common stock on the grant date and a maximum term of 10 years. Stock
options granted generally vest ratably over three to four years. Vesting of option awards may be accelerated based on age
and length of service. Stock options granted are expensed on a straight-line basis over the vesting period based on the fair
value of the awards on the date of grant. The grant date fair value of the options is calculated using a Black-Scholes
option-pricing model.
The following weighted average assumptions were used for stock option grants:
2015 2014 2013
Dividend yield 2.0% 2.0% 3.0%
Expected volatility 26% 31% 41%
Risk-free interest rate 1.2% 1.5% 0.9%
Expected life of stock option (years) 5.0 5.0 5.0
The dividend yield assumption represents the Company’s expected dividend yield based on its historical dividend payouts
and management’s expectations. The expected volatility is based on the Company’s historical and implied volatilities. The
risk-free interest rate for periods within the expected option life is based on the U.S. Treasury yield curve at the grant date.
The expected life of the option is based on the Company’s past experience and other considerations.
The weighted average grant date fair value for options granted during 2015, 2014 and 2013 was $25.12, $25.59 and
$18.16, respectively.
A summary of the Company’s stock option activity for 2015 is presented below (shares and intrinsic value in millions):
Weighted Average
Remaining
Weighted Average Contractual Term Aggregate
Shares Exercise Price (Years) Intrinsic Value
Outstanding at January 1 7.2 $ 65.07 6.7 $ 485
Granted 1.6 128.58
Exercised (1.4) 50.50
Forfeited (0.1) 106.17
Outstanding at December 31 7.3 81.11 6.7 222
Exercisable at December 31 4.2 59.02 5.4 201
The intrinsic value of a stock option is the amount by which the fair value of the underlying stock exceeds the exercise
price of the option. The total intrinsic value of options exercised was $111 million, $243 million and $299 million during
the years ended December 31, 2015, 2014 and 2013, respectively.
149