US Bank 2003 Annual Report Download - page 96

Stock-based Compensation
As part of its employee and director compensation Stock incentive plans of acquired companies are
programs, the Company may grant certain stock awards generally terminated at the merger closing dates. Option
under the provisions of the existing stock compensation holders under such plans receive the Company’s common
plans, including plans assumed in acquisitions. The plans stock, or options to buy the Company’s stock, based on the
provide for grants of options to purchase shares of common conversion terms of the various merger agreements. The
stock at a fixed price generally equal to the fair value of the historical stock award information presented below reflects
underlying stock at the date of grant. Option grants are awards originally granted under acquired companies’ plans.
generally exercisable up to ten years from the date of grant. At December 31, 2003, there were 41.8 million shares
In addition, the plans provide for grants of shares of (subject to adjustment for forfeitures) available for grant
common stock or stock units that are subject to restriction under our current stock incentive plan.
on transfer. Most stock awards vest over three to five years
and are subject to forfeiture if certain vesting requirements
are not met.
The following is a summary of shares issuable under stock options outstanding and exercised under various stock option
plans of the Company:
2003 2002 2001
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 ********************** 206,252,590 $22.77 201,610,265 $22.58 153,396,226 $22.80
Granted ********************* 1,872,653 23.00 29,742,189 21.81 65,144,310 21.25
Assumed/converted (a)******** 1,116,884 — — — 8,669,285 16.40
Exercised ******************** (22,484,069) 18.27 (9,594,213) 13.26 (12,775,067) 13.44
Cancelled******************** (21,235,704) 25.13 (15,505,651) 24.18 (12,824,489) 23.29
Number outstanding at end of year** 165,522,354 $22.93 206,252,590 $22.77 201,610,265 $22.58
Exercisable at end of year ******** 116,427,321 $23.60 123,195,273 $23.63 117,534,343 $22.36
Restricted share plans
Number outstanding at beginning
of year ********************** 2,280,057 2,177,588 6,377,137
Granted ********************* 58,481 806,355 1,021,887
Assumed/converted *********** — — 298,988
Cancelled/vested ************* (1,034,432) (703,886) (5,520,424)
Number outstanding at end of year** 1,304,106 2,280,057 2,177,588
Weighted-average fair value of
shares granted *************** $ 6.82 $ 7.03 $ 6.76
(a) The number of shares subject to then-outstanding stock options have been multiplied by, and the exercise prices have been divided by, a factor of 1.0068 in order to maintain the
economic value of the options following the spin off of Piper Jaffray Companies.
Additional information regarding stock options outstanding as of December 31, 2003, 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
$.83 — $10.00 ************************************** 2,893,745 1.4 $ 5.90 2,890,211 $ 5.90
$10.01 — $15.00************************************ 4,120,299 3.8 11.72 3,561,885 11.55
$15.01 — $20.00************************************ 34,269,234 7.1 18.79 20,441,742 18.58
$20.01 — $25.00************************************ 78,525,163 7.1 22.43 45,944,620 22.70
$25.01 — $30.00************************************ 40,092,423 5.0 28.43 37,967,373 28.49
$30.01 — $35.00************************************ 5,138,138 3.4 32.65 5,138,138 32.65
$35.01 — $36.95************************************ 483,352 3.0 35.81 483,352 35.81
165,522,354 6.3 $22.93 116,427,321 $23.60
94 U.S. Bancorp
Note 19