ComEd 2003 Annual Report Download - page 120

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118 Notes to Consolidated Financial Statements
EXELON CORPORATION AND SUBSIDIARY COMPANIES
ComEd Financing II and ComEd Financing III are sub-
sidiary trusts of ComEd. Each of ComEd trust’s sole assets are
subordinated deferrable interest securities issued by ComEd
bearing interest rates equivalent to the distribution rate of
the related trust security. The interest expense on the de-
bentures and deferrable interest securities was included in
distributions on preferred securities of subsidiaries in the
Consolidated Statements of Income and is deductible for
income tax purposes.
The preferred securities issued by each of ComEd Financ-
ing II and ComEd Financing III have no voting privileges, ex-
cept (i) for the right to approve a merger, consolidation or
other transaction involving the applicable trust that would
result in certain United States Federal income tax con-
sequences to that trust, (ii) with respect to certain amend-
ments to the applicable trust agreement, (iii) for certain
voting privileges that arise upon an event of default under
the applicable trust agreement or (iv) with respect to certain
amendments to the related ComEd guarantee agreement.
The preferred securities issued by PECO Trust III have no
voting privileges, except (i) for the right to approve a merger,
consolidation or other transaction involving the applicable
trust that would result in a change in terms of the preferred
securities, listing status on a national securities exchange,
ratings by nationally recognized rating agencies, or rights of
holders of the preferred securities, or that would result in
certain Federal income tax consequences; (ii) with respect to
certain amendments to the applicable trust agreement or
(iii) for certain voting privileges that arise upon an event of
default under the applicable trust agreement. The preferred
securities issued by PECO Trust IV have no voting privileges,
except (i) for the right to approve a merger, consolidation or
other transaction involving the applicable trust that would
result in certain United States Federal income tax con-
sequences to that trust, (ii) with respect to certain amend-
ments to the applicable trust agreement, (iii) for certain
voting privileges that arise upon an event of default under
the applicable trust agreement or (iv) with respect to certain
amendments to the related PECO guarantee agreement.
NOTE 17 ‰COMMON STOCK
At December 31, 2003 and 2002, common stock without par
value consisted of 600,000,000 and 600,000,000 shares
authorized and 328,182,522 and 323,312,586 shares out-
standing, respectively. See Note 24 – Subsequent Events for
information regarding a quarterly dividend declared on Jan-
uary 27, 2004 and a proposed stock split.
Stock-Based Compensation Plans
Exelon maintains Long-Term Incentive Plans (LTIPs) for cer-
tain full-time salaried employees. The types of long-term
incentive awards that have been granted under the LTIPs are
non-qualified options to purchase shares of Exelon’s com-
mon stock and common stock awards. At December 31, 2003,
there were options for approximately 10,600,000 shares
remaining for issuance under the LTIPs.
The exercise price of the stock options is equal to the fair
market value of the underlying stock on the date of option
grant. Options granted under the LTIPs become exercisable
upon attainment of a target share value and/or date. All op-
tions expire 10 years from the date of grant. Information
with respect to the LTIPs at December 31, 2003 and changes
for the three years then ended, is as follows:
Shares 2003
Weighted
Average
Exercise
Price (per
share)
2003 Shares 2002
Weighted
Average
Exercise
Price (per
share)
2002 Shares 2001
Weighted
Average
Exercise
Price (per
share)
2001
Balance at January 1 15,886,990 $45.80 14,039,996 $43.96 15,287,859 $ 42.13
Options granted/assumed 3,173,200 49.69 3,938,632 47.12 629,200 66.42
Options exercised (4,508,695) 38.05 (1,821,339) 33.37 (1,695,474) 34.84
Options canceled (397,802) 50.18 (270,299) 53.62 (181,589) 52.64
Balance at December 31 14,153,693 $ 49.01 15,886,990 $45.80 14,039,996 $43.96
Exercisable at December 31 9,016,348 $48.66 10,491,184 $43.96 8,006,193 $ 38.75
Weighted average fair value of options granted during
year $ 11.03 $ 13.62 $ 19.59