Bank of Montreal 2007 Annual Report Download - page 127

BMO Financial Group 190th Annual Report 2007 123
Notes
The following table summarizes information about our Stock Option Plan:
(Canadian $, except as noted) 2007 2006 2005
Weighted- Weighted- Weighted-
Number of average Number of average Number of average
stock options exercise price stock options exercise price stock options exercise price
Outstanding at beginning of year 23,254,639 $ 38.55 26,919,349 $ 35.86 30,442,060 $ 33.87
Granted 1,229,500 68.96 1,390,700 63.04 1,471,764 56.60
Exercised 3,774,644 31.86 5,014,557 30.87 4,736,826 29.30
Forfeited/cancelled 43,882 54.42 37,053 46.77 257,649 36.77
Expired 8,900 19.93 3,800 15.50 – n/a
Outstanding at end of year 20,656,713 41.55 23,254,639 38.55 26,919,349 35.86
Exercisable at end of year 15,585,532 36.01 17,947,453 34.35 20,016,144 32.68
Available for grant 3,863,301 2,047,729 3,397,576
Outstanding stock options as a
percentage of outstanding shares 4.14% 4.64% 5.38%
n/a –not applicable
Options outstanding and options exercisable as at October 31, 2007 and 2006 by range of exercise price were as follows:
(Canadian $, except as noted) 2007 2006
Options outstanding Options exercisable Options outstanding Options exercisable
Weighted- Weighted-
average Weighted- Weighted- average Weighted- Weighted-
remaining average Number average remaining average Number average
Number of contractual exercise of stock exercise Number of contractual exercise of stock exercise
Range of exercise prices stock options life (years) price options price stock options life (years) price options price
$15.50 to $20.00 –– $ –– $ – 140,387 0.1 $ 19.93 140,387 $ 19.93
$20.01 to $30.00 2,492,855 2.0 25.60 2,492,855 25.60 3,441,275 3.0 25.60 3,441,275 25.60
$30.01 to $40.00 10,604,596 3.1 35.69 10,184,016 35.57 13,135,225 3.9 35.36 12,313,275 35.24
$40.01 to $68.32 6,342,762 6.3 52.37 2,908,661 46.48 6,537,752 7.2 52.16 2,052,516 44.67
$68.33 and over 1,216,500 9.0 68.97 –– ––– ––
The following table summarizes nonvested stock option activity for the years ended October 31, 2007 and 2006:
(Canadian $, except as noted) 2007 2006
Weighted- Weighted-
Number of average grant Number of average grant
stock options date fair value stock options date fair value
Nonvested at beginning of year 5,307,186 $ 8.89 6,903,205 $ 7.82
Granted 1,229,500 7.56 1,390,700 10.17
Vested 1,442,754 8.25 2,953,266 7.14
Forfeited/cancelled 22,751 10.16 33,453 9.19
Nonvested at end of year 5,071,181 $ 8.74 5,307,186 $ 8.89
Employee compensation expense related to this plan for the years
ended October 31, 2007, 2006 and 2005 was $11 million, $14 million
and $13 million before tax, respectively ($10 million, $13 million and
$12 million after tax, respectively).
The intrinsic value of a stock option grant is the difference between
the current market price for our common shares and the strike price
of the option. The aggregate intrinsic value for stock options outstanding
at October 31, 2007, 2006 and 2005 was $443 million, $719 million and
$591 million, respectively. The aggregate intrinsic value for stock options
exercisable at October 31, 2007, 2006 and 2005 was $421 million,
$629 million and $503 million, respectively.
Change in Accounting Policy
During the year ended October 31, 2006, we adopted the CICA’s new
accounting requirements for stock-based compensation. The new rules
require that stock-based compensation granted to employees eligible
to retire be expensed at the time of grant. Previously, we amortized the
cost over the vesting period.
The following table summarizes further information about our Stock
Option Plan:
(Canadian $ in millions, except as noted) 2007 2006 2005
Unrecognized compensation cost
for nonvested stock option awards $ 10 $ 12 $ 13
Weighted-average period over
which it is recognized (in years) 2.6 3.0 2.9
Total intrinsic value of
stock options exercised $138 $ 170 $ 131
Cash proceeds from
stock options exercised $120 $ 155 $ 139
Actual tax benefits realized on
stock options exercised $4 $ 14 $ 7