Morgan Stanley 2015 Annual Report Download - page 232

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The aggregate intrinsic value of stock options exercised in 2015 and 2014 was $2 million per year, with a weighted average
exercise price of $30.01 and $24.68 for 2015 and 2014, respectively. No stock options were exercised during 2013. At
December 31, 2015, the intrinsic value of in the money exercisable stock options was $28 million.
Stock Options Outstanding and Exercisable.
At December 31, 2015
Options Outstanding Options Exercisable
Range of Exercise Prices
Number
Outstanding
Weighted Average
Exercise Price
Average
Remaining Life
(Years)
Number
Exercisable
Weighted Average
Exercise Price
Average
Remaining Life
(Years)
(options in millions)
$22.00 – $39.99 ................... 6 $26.85 2.0 4 $28.13 2.0
$50.00 – $59.99 ................... 1 52.43 0.3 1 52.43 0.3
$60.00 – $76.99 ................... 10 66.75 0.9 10 66.75 0.9
Total ............................ 17 15
Performance-Based Stock Units.
PSUs will vest and convert to shares of common stock at the end of the performance period only if the Company satisfies
predetermined performance and market-based conditions over the three-year performance period that began on January 1 of
the grant year and ends three years later on December 31. Under the terms of the award, the number of PSUs that will
actually vest and convert to shares will be based on the extent to which the Company achieves the specified performance
goals during the performance period. PSUs have vesting, restriction and cancellation provisions that are generally similar to
those of RSUs.
One-half of the award will be earned based on the Company’s average return on equity, excluding the impact of the
fluctuation in its credit spreads and other credit factors for certain of its long-term and short-term borrowings, primarily
structured notes, that are accounted for at fair value, certain gains or losses associated with the sale of specified businesses,
specified goodwill impairments, certain gains or losses associated with specified legal settlements related to business
activities conducted prior to January 1, 2011 and specified cumulative catch-up adjustments resulting from changes in an
existing, or application of a new, accounting principle that is not applied on a fully retrospective basis (“MS Average ROE”).
The number of PSUs ultimately earned for this portion of the awards will be determined by applying a multiplier within the
following ranges:
Minimum Maximum
Grant Year MS Average ROE Multiplier MS Average ROE Multiplier
2015 ....................................... Less than 5% 0.0 11.5% or more 1.5
2014 ....................................... Less than 5% 0.0 11.5% or more 1.5
2013 ....................................... Less than 5% 0.0 13% or more 2.0
On the date of award, the fair value per share of this portion was $34.58, $32.81 and $22.85 for 2015, 2014 and 2013,
respectively.
One-half of the award will be earned based on the Company’s total shareholder return, relative to the total shareholder return
of the S&P 500 Financial Sectors Index (“Relative TSR”). The number of PSUs ultimately earned for this portion of the
award will be determined by applying a multiplier within the following ranges:
Minimum Maximum
Grant Year Relative TSR Multiplier Relative TSR Multiplier
2015 ....................................... Less than -50% 0.0 25% or more 1.5
2014 ....................................... Less than -50% 0.0 25% or more 1.5
2013 ....................................... Less than -50% 0.0 50% or more 2.0
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