Bank of America 2004 Annual Report Download - page 142

BANK OF AMERICA 2004 141
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 employ-
ees 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 mil-
lion 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 out-
standing 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 con-
tinue to be exercisable following termination of employment under
certain circumstances. At December 31, 2004, approximately 6 mil-
lion options were outstanding under this plan. No further awards
may be granted.
Additional stock option plans assumed in connection with vari-
ous acquisitions remain outstanding and are included in the following
tables. No further awards may be granted under these plans.