American Express 2012 Annual Report Download - page 100

Download and view the complete annual report

Please find page 100 of the 2012 American Express annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 120

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120

AMERICAN EXPRESS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following is a detail of other, net for the years ended
December 31:
(Millions) 2012 2011 2010
Professional services $ 2,963 $ 2,951 $ 2,806
Occupancy and equipment 1,823 1,685 1,562
Communications 383 378 383
MasterCard and Visa settlements,
net of legal fees —(562) (852)
Other 1,404 1,260 1,208
Total other, net $ 6,573 $ 5,712 $ 5,107
Other expense includes general operating expenses, gains (losses)
on sale of assets or businesses not classified as discontinued
operations, litigation, internal and regulatory review-related
reimbursements and insurance costs or settlements, investment
impairments and certain Loyalty Partner expenses.
NOTE 20
STOCK PLANS
STOCK OPTION AND AWARD PROGRAMS
Under the 2007 Incentive Compensation Plan and previously
under the 1998 Incentive Compensation Plan, awards may be
granted to employees and other key individuals who perform
services for the Company and its participating subsidiaries.
These awards may be in the form of stock options, restricted
stock awards or units (RSAs), portfolio grants (PGs) or other
incentives, and similar awards designed to meet the requirements
of non-U.S. jurisdictions.
For the Company’s Incentive Compensation Plans, there were
a total of 36 million, 38 million and 40 million common shares
unissued and available for grant as of December 31, 2012, 2011
and 2010, respectively, as authorized by the Company’s Board of
Directors and shareholders.
The Company granted stock option awards to its Chief
Executive Officer (CEO) in November 2007 and January 2008
that have performance-based and market-based conditions.
These option awards are separately disclosed and are excluded
from the information and tables presented in the following
paragraphs.
A summary of stock option and RSA activity as of December 31,
2012, and changes during the year is presented below:
Stock Options RSAs
(Shares in thousands) Shares
Weighted-
Average
Exercise
Price Shares
Weighted-
Average
Grant
Price
Outstanding as of
December 31, 2011 42,457 $ 41.63 13,996 $ 33.69
Granted 1,205 $ 49.23 4,270 $ 49.80
Exercised/vested (10,429) $ 35.28 (5,782) $ 31.53
Forfeited (280) $ 34.55 (684) $ 37.84
Expired (1,092) $ 54.05 — $ —
Outstanding as of
December 31, 2012 31,861 $ 43.62 11,800 $ 40.31
Options vested and
expected to vest as of
December 31, 2012 31,792 $ 43.61 — —
Options exercisable as of
December 31, 2012 27,309 $ 44.91 — —
The Company recognizes the cost of employee stock awards
granted in exchange for employee services based on the grant-
date fair value of the award, net of expected forfeitures. Those
costs are recognized ratably over the vesting period.
STOCK OPTIONS
Each stock option has an exercise price equal to the market price
of the Company’s common stock on the date of grant and a
contractual term of 10 years from the date of grant. Stock
options generally vest 25 percent per year beginning with the
first anniversary of the grant date.
The weighted-average remaining contractual life and the
aggregate intrinsic value (the amount by which the fair value of
the Company’s stock exceeds the exercise price of the option) of
the stock options outstanding, exercisable, and vested and
expected to vest as of December 31, 2012 are as follows:
Outstanding Exercisable
Vested and
Expected to
Vest
Weighted-average remaining
contractual life (in years) 4.6 4.1 4.6
Aggregate intrinsic value (millions) $ 444 $ 346 $ 443
98