TCF Bank 2007 Annual Report Download - page 84

64 | TCF Financial Corporation and Subsidiaries
Note 15. Stock Compensation
The TCF Financial Incentive Stock Program (the “Program”)
was adopted to enable TCF to attract and retain key person-
nel. Under the Program, no more than 5% of the shares of
TCF common stock outstanding on the date of initial share-
holder approval may be awarded. At December 31, 2007,
there were 3,937,813 shares reserved for issuance under the
Program, including 144,050 shares related to outstanding
stock options that are fully vested.
At December 31, 2007, there were 1,455,166 shares of
performance-based restricted stock that will vest only if
certain earnings per share goals and service conditions are
achieved. Failure to achieve the goals and service conditions
will result in all or a portion of the shares being forfeited.
In January 2008,1,012,666 shares of performance-based
restricted stock vested. Other restricted stock grants vest
over periods from three to seven years. The weighted-
average grant date fair value of restricted stock was $26.81,
$25.31 and $27.78 for shares granted in 2007, 2006 and 2005,
respectively. Compensation expense for restricted stock
totaled $7.1 million, $7.0 million and $4.7 million in 2007,
2006 and 2005, respectively. The recognized tax benefit
for stock compensation expense was $2.4 million, $2.3 mil-
lion and $1.6 million in 2007, 2006 and 2005, respectively.
Unrecognized stock compensation for restricted stock
awards was $13.8 million with a weighted-average remain-
ing amortization period of 1.4 years at December 31, 2007,
compared with $19.6 million with a weighted-average
remaining amortization period of 2 years at December 31,
2006 and $20.4 million with a weighted-average remaining
amortization period of 1.8 years at December 31, 2005.
TCF has also issued stock options under the Program that
generally become exercisable over a period of one to 10 years
from the date of the grant and expire after 10 years. All
outstanding options have a fixed exercise price equal to
the market price of TCF common stock on the date of grant.
As of December 31, 2007 and 2006, all outstanding stock
options are vested. Stock options outstanding and exercis-
able at December 31, 2007 had exercise prices ranging from
$11.78 to $16.09, a weighted-average exercise price of
$13.91 and a weighted-average contractual life of 1.3 years.
In January 2008, TCF issued 1,626,000 nonqualified stock
options under the Program. The options have an exercise
price of $15.75 per share, with 50% exercisable in 2011 and
the remaining 50% exercisable in 2012. TCF also issued under
the Program 100,000 shares of performance-based restricted
stock, with 50% of the award vesting in each of 2008 and
2009, provided certain return on equity goals and service
conditions are met.
The following table reflects TCF’s stock option and restricted stock transactions under the Program since December 31, 2004.
Restricted Stock Stock Options
Exercise Price
Weighted-
Shares Price Range Shares Range Average
Outstanding at December 31, 2004 3,032,226 $ 9.87-$30.28 325,864 $ 5.71-$16.64 $12.91
Granted 526,400 25.97- 28.71 – – –
Exercised – – (66,064) 5.71- 16.64 9.60
Forfeited (111,185) 11.05- 30.28 – – –
Vested (1,138,165) 9.87- 21.85 – – –
Outstanding at December 31, 2005 2,309,276 9.87- 30.28 259,800 11.78- 16.64 13.76
Granted 713,900 25.18- 26.69 – – –
Exercised – – (28,667) 11.78- 16.09 12.33
Forfeited (133,535) 9.87- 30.28 – – –
Vested (270,300) 18.03- 24.10 – – –
Outstanding at December 31, 2006 2,619,341 9.87- 30.28 231,133 11.78- 16.64 13.93
Granted 198,850 24.26- 28.64 – – –
Exercised – – (87,083) 11.78- 16.64 13.96
Forfeited (140,775) 9.87- 30.13 – – –
Vested (152,200) 20.38- 26.39 – – –
Outstanding at December 31, 2007 2,525,216 9.87- 30.28 144,050 11.78- 16.09 13.91
Exercisable at December 31, 2007 N.A. N.A. 144,050 11.78- 16.09 13.91
N.A. Not Applicable.