Advance Auto Parts 2013 Annual Report Download - page 88

ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 28, 2013, December 29, 2012 and December 31, 2011
(in thousands, except per share data)
F-36
The fair value of each performance-based RSU and share of restricted stock is determined based on the market price of the
Company’s common stock on the date of grant. The weighted average fair value of performance-based RSUs or share of
restricted stock granted during Fiscal 2013, 2012 and 2011 was $77.47, $75.20 and $67.16 per share, respectively. The total
grant date fair value of performance-based restricted stock vested during Fiscal 2013 and 2012 was $1,290 and $4,858. No
awards vested prior to Fiscal 2012. As of December 28, 2013, the maximum potential payout under the Company’s currently
outstanding performance-based RSUs was 579 shares.
Subsequent Grant of Awards
Subsequent to December 28, 2013, the Company granted share-based compensation awards to GPI team members in
connection with the Company’s acquisition of GPI. Refer to Note 23, Subsequent Event, for further details of the grant.
Deferred Stock Units
The Company grants share-based awards annually to its Board of Directors in connection with its annual meeting of
stockholders. These awards are granted in the form of DSUs as provided for in the Advance Auto Parts, Inc. Deferred Stock
Unit Plan for Non-Employee Directors and Selected Executives, or the DSU Plan. Each DSU is equivalent to one share of
common stock of the Company. The DSUs are awarded in two equal portions, each with different schedules for conversion into
common shares. The first type of DSUs is fully vested after one year of board service and is distributed in common shares after
the director’s service on the board ends. The second type of DSUs is fully vested after one year of board service and is
distributed in common shares after three years. Directors may choose to defer receipt of the second type of DSUs beyond the
initial three years. Additionally, the DSU Plan provides for the deferral of compensation as earned in the form of (i) an annual
retainer for directors, and (ii) wages for certain highly compensated Team Members of the Company. These DSUs are settled in
common stock with the participants at a future date, or over a specified time period as elected by the participants in accordance
with the DSU Plan.
The Company granted 10 DSUs in Fiscal 2013. The weighted average fair value of DSUs granted during Fiscal 2013, 2012
and 2011 was $83.63, $69.82, and $62.99, respectively. The DSUs are awarded at a price equal to the market price of the
Company’s underlying stock on the date of the grant. For Fiscal 2013, 2012 and 2011, respectively, the Company recognized a
total of $840, $960, and $1,008 on a pre-tax basis, in compensation expense for these DSU grants.
LTIP Availability
At December 28, 2013, there were 7,408 shares of common stock currently available for future issuance under the 2004
Plan based on management’s current estimate of the probable vesting outcome for performance-based awards. The Company
issues new shares of common stock upon exercise of stock options and SARs. Availability is determined net of forfeitures and
is reduced by an additional 0.7 availability factor for restricted stock and DSUs in accordance with the LTIP. Availability also
includes shares which became available for reissuance in connection with the exercise of SARs.
Employee Stock Purchase Plan
The Company also offers an ESPP. Eligible Team Members may purchase the Company’s common stock at a discount to
its fair market value on the date of purchase. During Fiscal 2012, the Company increased this discount from 5% to 10%. There
are annual limitations on Team Member elections of either $25 per Team Member or 10% of compensation, whichever is less.
Under the plan, Team Members acquired 23, 34 and 38 shares in Fiscal 2013, 2012 and 2011, respectively. As of December 28,
2013, there were 1,138 shares available to be issued under the plan.