Note 16
Stock-based Compensation Plans
At December 31, 2004, the Corporation had certain stock-based compensation plans that are described below. For all stock-based compensation awards issued prior to January 1, 2003, the Corporation applied the provisions of APB 25 in accounting for its stock option and award plans. Stock-based compensation plans enacted after December 31, 2002, are accounted for under the provisions of SFAS 123. For additional information on the accounting for stock-based compensation plans and pro forma disclosures, see Note 1 of the Consolidated Financial Statements.
The following table presents information on equity compensation plans at December 31, 2004:
| |
Number of Shares to be Issued Upon Exercise of Outstanding Options (1,4) |
Weighted Average Exercise Price of Outstanding Options (2) |
Number of Shares Remaining for Future Issuance Under Equity Compensation Plans (3) |
|
 |
| Plans approved by shareholders |
228,770,883 |
$33.69 |
210,238,781 |
| Plans not approved by shareholders |
38,264,137 |
29.61 |
- |
| Total |
267,035,020 |
$33.09 |
210,238,781 |
|
|
The Corporation has certain stock-based compensation plans that were approved by its shareholders. These plans are the Key Employee Stock Plan and the Key Associate Stock Plan.
Descriptions of the material features of these plans follow.
Key Employee Stock Plan
The Key Employee Stock Plan, as amended and restated, provided for different types of awards. These include stock options, restricted stock shares and restricted stock units.
Under the plan, ten-year options to purchase approximately 260 million shares of common stock were granted through December 31, 2002, to certain employees at the closing market price on the respective grant dates. Options granted under the plan generally vest in three or four equal annual installments. At December 31, 2004, approximately 111 million options were outstanding under this plan.
No further awards may be granted.
Key Associate Stock Plan
On April 24, 2002, the shareholders approved the Key Associate Stock Plan to be effective January 1, 2003. This approval authorized and reserved 200 million shares for grant in addition to the remaining amount under the Key Employee Stock Plan as of December 31, 2002, which was approximately 34 million shares plus any shares covered by awards under the Key Employee Stock Plan that terminate, expire, lapse or are cancelled after December 31, 2002. Upon the Merger, the shareholders authorized an additional 102 million shares for grant under the Key Associate Stock Plan. At December 31, 2004, approximately 110 million options were outstanding under this plan. Approximately 10 million shares of restricted stock and restricted stock units were granted during 2004. These shares of restricted stock generally vest in three equal annual installments beginning one year from the grant date. The Corporation incurred restricted stock expense of $288 million, $276 million and $250 million in 2004, 2003 and 2002, respectively.
The Corporation has certain stock-based compensation plans that were not approved by its shareholders. These broad-based plans are the 2002 Associates Stock Option Plan and Take Ownership!. Descriptions of the material features of these plans follow.
2002 Associates Stock Option Plan
The Bank of America Corporation 2002 Associates Stock Option Plan covered all employees below a specified executive grade level. Under the plan, eligible employees received a one-time award of a predetermined number of options entitling them to purchase shares of the Corporation’s common stock. All options are nonqualified and have an exercise price equal to the fair market value on the date of grant.
Approximately 108 million options were granted on February 1, 2002. During 2003, the first option vesting trigger was achieved. During 2004, the second option vesting trigger was achieved. In addition, the options continue to be exercisable following termination of employment under certain circumstances. At December 31, 2004, approximately 33 million options were outstanding under this plan. The options expire on January 31, 2007. No further awards may be granted.
Take Ownership!
The Bank of America Global Associate Stock Option Program (Take Ownership!) covered all employees below a specified executive grade level. Under the plan, eligible employees received an award of a predetermined number of stock options entitling them to purchase shares of the Corporation’s common stock at the fair market value on the grant date. All options are nonqualified. At January 2, 2004, all options issued under this plan were fully vested. These options expire five years after the grant date. In addition, the options continue to be exercisable following termination of employment under certain circumstances. At December 31, 2004, approximately 6 million options were outstanding under this plan. No further awards may be granted.
Additional stock option plans assumed in connection with various acquisitions remain outstanding and are included in the following tables. No further awards may be granted under these plans.
The following tables present the status of all plans at December 31, 2004, 2003 and 2002, and changes during the years then ended:
|
|
|
|
|
|
|
| Employee stock options |
2004: Shares |
2004: Weighted Average Exercise Price |
2003: Shares |
2003: Weighted Average Exercise Price |
2002: Shares |
2002: Weighted Average Exercise Price |
| |
2004 |
2003 |
2002 |
| |
| Employee stock options |
Shares |
Weighted
Average
Exercise
Price |
Shares |
Weighted
Average
Exercise
Price |
Shares |
Weighted
Average
Exercise
Price |
|
| Outstanding at January 1 |
320,331,380 |
$30.66 |
411,447,300 |
$29.10 |
369,100,032 |
$27.60 |
| Options assumed through acquisition |
78,761,708 |
28.68 |
- |
- |
- |
- |
| Granted |
63,472,170 |
40.80 |
61,336,790 |
35.03 |
171,671,430 |
30.73 |
| Exercised |
(111,958,135) |
27.77 |
(132,491,842) |
27.72 |
(98,116,356) |
26.20 |
| Forfeited |
(13,055,564) |
34.15 |
(19,960,868) |
31.41 |
(31,207,806) |
29.37 |
| Outstanding at December 31 |
337,551,559 |
32.93 |
320,331,380 |
30.66 |
411,447,300 |
29.10 |
| Options exercisable at December 31 |
243,735,846 |
30.73 |
167,786,372 |
30.02 |
179,151,940 |
29.51 |
Weighted average fair value of
options granted during the year |
|
$ 5.59 |
|
$ 6.77 |
|
$ 6.21 |
|
|
| Restricted stock/unit awards |
2004: Shares |
2004: Weighted Average Grant Price |
2003: Shares |
2003: Weighted Average Grant Price |
2002: Shares |
2002: Weighted Average Grant Price |
| |
2004 |
2003 |
2002 |
| |
| Restricted stock/unit awards |
Shares |
Weighted
Average
Grant
Price |
Shares |
Weighted
Average
Grant
Price |
Shares |
Weighted
Average
Grant
Price |
|
| Outstanding unvested grants at January 1 |
16,170,546 |
$31.64 |
15,679,946 |
$30.37 |
13,183,492 |
$29.21 |
| Share obligations assumed through acquisition |
7,720,476 |
31.62 |
- |
- |
- |
- |
| Granted |
10,338,327 |
41.03 |
8,893,718 |
34.69 |
9,532,754 |
30.57 |
| Vested |
(12,031,945) |
29.43 |
(7,697,576) |
32.47 |
(6,763,746) |
28.44 |
| Canceled |
(1,747,839) |
38.10 |
(705,542) |
32.85 |
(272,554) |
29.48 |
| Outstanding unvested grants at December 31 |
20,449,565 |
$37.12 |
16,170,546 |
$31.64 |
15,679,946 |
$30.37 |
|
The following table summarizes information about stock options outstanding at December 31, 2004:
| Range of Exercise Prices |
Outstanding Options: Number Outstanding at December 31, 2004 |
Outstanding Options: Weighted Average Remaining Term |
Outstanding Options: Weighted Average Exercise Price |
|
Options Exercisable: Number Exercisable at December 31, 2004 |
Options Exercisable: Weighted Average Exercise Price |
| |
Outstanding Options |
|
Options Exercisable |
| |
Range of Exercise Prices |
Number Outstanding at December 31, 2004 |
Weighted Average Remaining Term |
Weighted Average Exercise Price |
|
Number Exercisable at December 31, 2004 |
Weighted Average Exercise Price |
|
| $5.00 - $15.00 |
1,262,953 |
0.4 years |
$12.23 |
|
1,262,953 |
$12.23 |
| $15.01 - $23.25 |
10,692,931 |
5.1 years |
18.94 |
|
10,692,931 |
18.94 |
| $23.26 - $32.75 |
168,421,939 |
4.8 years |
28.93 |
|
168,068,284 |
28.92 |
| $32.76 - $49.50 |
157,173,736 |
7.1 years |
38.34 |
|
63,711,678 |
37.86 |
| Total |
337,551,559 |
5.9 years |
$32.93 |
|
243,735,846 |
$30.73 |
|
|
