US Bank 2005 Annual Report Download - page 92

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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 has
underlying stock at the date of grant. Option grants are been restated to reflect the options originally granted under
generally exercisable up to ten years from the date of grant. acquired companies’ plans.
In addition, the plans provide for grants of shares of At December 31, 2005, there were 25 million shares
common stock or stock units that are subject to restriction (subject to adjustment for forfeitures) available for grant
on transfer. Most stock awards vest over three to five years under various plans.
and are subject to forfeiture if certain vesting requirements
are not met.
The following is a summary of stock options outstanding and exercised under various stock options plans of the Company:
2005 2004 2003
Stock Weighted-Average Stock Weighted-Average Stock Weighted-Average
Year Ended December 31 Options/Shares Exercise Price Options /Shares Exercise Price Options/Shares Exercise Price
Stock option plans
Number outstanding at beginning of
year **************************** 134,727,285 $23.41 165,522,354 $22.93 206,252,590 $22.77
Granted**************************** 12,489,062 30.14 8,741,521 28.46 1,872,653 23.00
Assumed/converted (a)*************** — — — — 1,116,884 —
Exercised ************************** (17,719,565) 20.96 (27,319,242) 21.59 (22,484,069) 18.27
Cancelled (b) *********************** (3,513,321) 25.07 (12,217,348) 24.56 (21,235,704) 25.13
Number outstanding at end of
year **************************** 125,983,461 $24.38 134,727,285 $23.41 165,522,354 $22.93
Exercisable at end of year ************ 100,110,188 $23.64 101,027,155 $23.51 116,427,321 $23.60
Weighted-average fair value of shares
granted ************************* $ 6.65 $ 8.75 $ 6.82
Restricted share plans
Number outstanding at beginning of
year **************************** 2,265,625 1,304,106 2,280,057
Granted**************************** 1,024,622 1,338,054 58,481
Cancelled/vested******************** (646,076) (376,535) (1,034,432)
Number outstanding at end of
year **************************** 2,644,171 2,265,625 1,304,106
Weighted-average fair value of shares
granted ************************* $30.03 $28.42 $24.43
(a) In connection with the December 31, 2003, tax-free distribution of Piper Jaffray Companies, stock options were adjusted in accordance with provisions of the contracts based on an
exchange ratio of 1.0068 representing the relative stock price adjustment at the time of distribution.
(b) Options cancelled includes both non-vested (i.e., forfeitures) and vested shares.
90 U.S. BANCORP
Note 19