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BANK OF AMERICA CORP /DE/

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BANK OF AMERICA CORP /DE/

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1.0.0.3 false Stock-Based Compensation Plans false 1 $ false false iso4217_USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 iso4217_USD_per_shares Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares 0 shares Standard http://www.xbrl.org/2003/instance shares 0 5 Stock-Based Compensation Plans 3 us-gaap_DisclosureOfShareBasedCompensationArrangementsByShareBasedPaymentAwardTextBlock us-gaap true na duration string No definition available. false false false false false false false false false 1 false false 0 0 <div> NOTE 18 – Stock-Based Compensation Plans The compensation cost for the plans described below was $2.8 billion, $885 million and $1.2 billion in 2009, 2008 and 2007, respectively. The related income tax benefit was $1.0 billion, $328 million and $438 million for 2009, 2008 and 2007, respectively. The table below presents the assumptions used to estimate the fair value of stock options granted on the date of grant using the lattice option-pricing model. Lattice option-pricing models incorporate ranges of assumptions for inputs and those ranges are disclosed in the table below. The risk-free interest rate for periods within the contractual life of the stock option is based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatilities are based on implied volatilities from traded stock options on the Corporation’s common stock, historical volatility of the Corporation’s common stock, and other factors. The Corporation uses historical data to estimate stock option exercise and employee termination within the model. The expected term of stock options granted is derived from the output of the model and represents the period of time that stock options granted are expected to be outstanding. The estimates of fair value from these models are theoretical values for stock options and changes in the assumptions used in the models could result in materially different fair value estimates. The actual value of the stock options will depend on the market value of the Corporation’s common stock when the stock options are exercised. No stock options were granted in 2009.     <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="49%"></td> <td valign="bottom" width="12%"></td> <td></td> <td></td> <td valign="bottom" width="9%"></td> <td></td> <td></td> </tr> <tr> <td height="8"></td> <td height="8" colspan="3"></td> <td height="8" colspan="3"></td> </tr> <tr> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">2008</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">2007</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"> Risk-free interest rate </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2.05 – 3.85</td> <td valign="bottom" nowrap="nowrap">% </td> <td valign="bottom">  </td> <td valign="bottom" align="right">4.72 – 5.16</td> <td valign="bottom" nowrap="nowrap">% </td> </tr> <tr> <td valign="top"> Dividend yield </td> <td valign="bottom"> </td> <td valign="bottom" align="right">5.30</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">4.40</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Expected volatility </td> <td valign="bottom"> </td> <td valign="bottom" align="right">26.00 – 36.00</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">16.00 – 27.00</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Weighted-average volatility </td> <td valign="bottom"> </td> <td valign="bottom" align="right">32.80</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">19.70</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Expected lives (years) </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">6.6</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">6.5</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> </table> Excluded from the table above are assumptions used to estimate the fair value of approximately 108 million stock options assumed in connection with the Merrill Lynch acquisition. The fair value of these awards was estimated using a Black-Scholes option pricing model. Similar to options valued using the lattice option-pricing model described above, key assumptions used include the implied volatility based on the Corporation’s common stock of 75 percent, the risk-free interest rate based on the U.S. Treasury yield curve in effect at December 31, 2008, an expected dividend yield of 4.2 percent and the expected life of the options based on their actual remaining term. The Corporation has equity compensation plans which include the Key Employee Stock Plan, the Key Associate Stock Plan and the Merrill Lynch Employee Stock Compensation Plan. Descriptions of the material features of the equity compensation plans follow. Key Employee Stock Plan The Key Employee Stock Plan, as amended and restated, provided for different types of awards including stock options, restricted stock shares and restricted stock units. Under the plan, 10-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. At December 31, 2009, approximately 45 million fully vested 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. Subsequently, the shareholders authorized an additional 282 million shares for grant under the Key Associate Stock Plan. In conjunction with the Merrill Lynch acquisition, the shareholders authorized an additional 105 million shares for grant under the Key Associate Stock Plan. At December 31, 2009, approximately 152 million options were outstanding under this plan. Approximately 90 million shares of restricted stock and restricted stock units were granted in 2009. These shares of restricted stock generally vest in three equal annual installments beginning one year from the grant date with the exception of financial advisor awards that vest eight years from grant date. Employee Stock Compensation Plan The Corporation assumed the Merrill Lynch Employee Stock Compensation Plan. Future shares can be granted under this plan. Approximately 34 million shares of restricted stock units were granted in 2009 which generally vest in three equal annual installments beginning one year from the grant date. Awards granted prior to 2009 generally vest in four equal annual installments beginning one year from the grant date. At December 31, 2009, there were approximately 48 million shares outstanding. The following table presents the status of all option plans at December 31, 2009, and changes during 2009.     Employee stock options <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="56%"></td> <td valign="bottom" width="15%"></td> <td></td> <td></td> <td valign="bottom" width="8%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">Shares</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" colspan="2" align="right">Weighted- average Exercise Price</td> </tr> <tr> <td valign="top"> Outstanding at January 1, 2009 </td> <td valign="bottom"> </td> <td valign="bottom" align="right">232,429,057</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">43.08</td> </tr> <tr> <td valign="top"> Merrill Lynch acquisition, January 1, 2009 </td> <td valign="bottom"> </td> <td valign="bottom" align="right">107,521,280</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">62.89</td> </tr> <tr> <td valign="top"> Exercised </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(2,835</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">12.56</td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Forfeited </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">(36,224,754</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">46.31</td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Outstanding at December 31, 2009 (1) </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">303,722,748</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">49.71</td> </tr> <tr> <td valign="top"> Options exercisable at December 31, 2009 </td> <td valign="bottom"> </td> <td valign="bottom" align="right">275,180,674</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">49.45</td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Options vested and expected to vest (2) </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">303,640,869</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">49.71</td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="top" width="10" align="left">(1)</td> <td valign="top" align="left"> Includes 45 million options under the Key Employee Stock Plan, 152 million options under the Key Associate Stock Plan and 107 million options to employees of predecessor companies assumed in mergers. </td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="top" width="10" align="left">(2)</td> <td valign="top" align="left"> Includes vested shares and nonvested shares after a forfeiture rate is applied. </td> </tr> </table> At December 31, 2009, the Corporation had no aggregate intrinsic value of options outstanding, exercisable, and vested and expected to vest. The weighted-average remaining contractual term of options outstanding was 3.7 years, options exercisable was 3.2 years, and options vested and expected to vest was 3.7 years at December 31, 2009. The weighted-average grant-date fair value of options granted in 2008 and 2007 was $8.92 and $8.44. No options were granted in 2009.     The following table presents the status of the restricted stock/unit awards at December 31, 2009, and changes during 2009.     Restricted stock/unit awards <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="53%"></td> <td valign="bottom" width="14%"></td> <td></td> <td></td> <td valign="bottom" width="12%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">Shares</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">     </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" colspan="2" align="right">Weighted- average Grant Date Fair Value</td> </tr> <tr> <td valign="top"> Outstanding at January 1, 2009 </td> <td valign="bottom"> </td> <td valign="bottom" align="right">32,715,964</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">45.45</td> </tr> <tr> <td valign="top"> Merrill Lynch acquisition, January 1, 2009 </td> <td valign="bottom"> </td> <td valign="bottom" align="right">83,446,110</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">14.08</td> </tr> <tr> <td valign="top"> Granted </td> <td valign="bottom"> </td> <td valign="bottom" align="right">124,146,773</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">10.57</td> </tr> <tr> <td valign="top"> Vested </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(31,181,360</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">31.46</td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Cancelled </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">(34,099,465</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">14.39</td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Outstanding at December 31, 2009 </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">175,028,022</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">     </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">14.30</td> </tr> </table> At December 31, 2009, there was $677 million of total unrecognized compensation cost related to share-based compensation arrangements for all awards that is expected to be recognized over a weighted-average period of 0.89 years. The total fair value of restricted stock vested in 2009 was $203 million. In 2009, the amount of cash used to settle equity instruments was $397 million. Other Stock Plans As a result of the Merrill Lynch acquisition, the Corporation assumed the obligations of outstanding awards granted under the Merrill Lynch Financial Advisor Capital Accumulation Award Plans (FACAAP) and the Merrill Lynch Employee Stock Purchase Plan (ESPP). The FACAAP is no longer an active plan and no awards were granted in 2009. Awards granted in 2003 and thereafter are generally payable eight years from the grant date in a fixed number of the Corporation’s common stock. For outstanding awards granted prior to 2003, payment is generally made ten years from the grant date in a fixed number of the Corporation’s common stock unless the fair value of such shares is less than a specified minimum value, in which case, the minimum value is paid in cash. At December 31, 2009, there were 23 million shares outstanding under this plan. The ESPP allows eligible associates to invest from one percent to 10 percent of eligible compensation to purchase the Corporation’s common stock, subject to legal limits. Purchases were made at a discount of up to five percent of the average high and low market price on the relevant purchase date and the maximum annual contribution per employee was $23,750 in 2009. Up to 107 million shares have been authorized for issuance under the ESPP in 2009. The activity during 2009 is as follows:     <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="77%"></td> <td valign="bottom" width="10%"></td> <td></td> <td></td> </tr> <tr> <td height="8"></td> <td height="8" colspan="3"></td> </tr> <tr> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">Shares</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"> Available at January 1, 2009 </td> <td valign="bottom"> </td> <td valign="bottom" align="right">16,449,696</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Purchased through plan </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">(4,019,593</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Available at December 31, 2009 </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">12,430,103</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> </table> The weighted-average fair value of the ESPP stock purchase rights (i.e. the five percent discount on the Corporation’s common stock purchases) exercised by employees in 2009 is $0.57 per stock purchase right.   </div> NOTE 18 – Stock-Based Compensation Plans The compensation cost for the plans described below was $2.8 billion, $885 million and $1.2 billion in 2009, false false No definition available. No authoritative reference available. false false 1 1 false UnKnown UnKnown UnKnown false true