Assurant 2010 Annual Report Download - page 113

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F-43ASSURANT, INC.2010 Form 10K
18 Stock Based Compensation
Long-Term Incentive Plan
Prior to the approval of the ALTEIP, share based awards were granted
under the 2004 Assurant Long-Term Incentive Plan (“ALTIP”),
which authorized the granting of up to 10,000,000 new shares of
the Company’s common stock to employees and offi cers under the
ALTIP, Business Value Rights Program (“BVR”) and CEO Equity
Grants Program. Under the ALTIP, the Company was authorized to
grant restricted stock and SARs. Since May 2008, no new grants have
been made under this plan.
Restricted stock granted under the ALTIP vests on a prorated basis
over a three year period. SARs granted prior to 2007 under the ALTIP
cliff vest as of December 31 of the second calendar year following
the calendar year in which the right was granted, and have a fi ve year
contractual life. SARs granted in 2007 and through May 2008 cliff
vest on the third anniversary from the date the award was granted, and
have a fi ve year contractual life. SARs granted under the BVR Program
have a three year cliff vesting period. Restricted stock granted under
the CEO Equity Grants Program have variable vesting schedules.
Restricted Stock
A summary of the Company’s outstanding restricted stock is presented below:
Shares Weighted-Average
Grant Date Fair Value
Shares outstanding at December 31, 2009 149,170 $ 52.66
Vests (87,400) 52.74
Forfeitures (3,109) 48.64
SHARES OUTSTANDING AT DECEMBER 31, 2010 58,661 $ 52.77
e compensation expense recorded related to restricted stock was $1,647,
$4,409 and $7,417 for the years ended December 31, 2010, 2009 and
2008, respectively.  e related total income tax benefi t recognized was
$577, $1,543 and $2,398 for the years ended December 31, 2010, 2009
and 2008 respectively. Total compensation expense for 2008 includes
$566 for restricted stock granted to the Board of Directors, which vested
immediately.  e weighted average grant date fair value for restricted
stock granted in 2009 and 2008 was $29.77 and $55.89, respectively.
As of December 31, 2010, there was $407 of unrecognized compensation
cost related to outstanding restricted stock.  at cost is expected to be
recognized over a weighted-average period of 0.5 years.  e total fair
value of shares vested during the years ended December 31, 2010, 2009
and 2008 was $2,962, $2,880 and $6,264 respectively.
Stock Appreciation Rights
A summary of the Company’s SARs is presented below:
Rights Weighted Average
Exercise Price
Weighted Average
Remaining
Contractual Term
(Years) Aggregate
Intrinsic Value
SARs outstanding, December 31, 2009 4,872,458 $ 46.82 2.07 $ 5,297
Grants — — — —
Exercises (254,130) 28.91 — —
Forfeitures and adjustments (826,479) 45.99 — —
SARS OUTSTANDING, DECEMBER 31, 2010 3,791,849 $ 48.20 1.42 $ 12,301
SARS EXERCISABLE AT DECEMBER 31, 2010 2,602,299 $ 42.52 1.21 $ 12,301
ere were no SARs granted during the years ended December 31, 2010
and 2009. Currently there are no plans to award SARs in the future.  ere
were 1,497,891 SARs granted during the year ended December 31, 2008.
e compensation expense recorded related to SARs was $6,553, $10,046
and $14,179 for the years ended December 31, 2010, 2009 and 2008,
respectively.  e related income tax benefi t recognized was $2,294,
$3,516 and $4,922 for the years ended December 31, 2010, 2009
and 2008. Total compensation expense for 2008 includes $116 for
SARs granted to the Board of Directors, which vested immediately.
e weighted average grant date fair value for SARs granted in 2008
was $13.77.
e total intrinsic value of SARs exercised during the years ended
December 31, 2010, 2009 and 2008 was $1,316, $433 and $38,527,
respectively. As of December 31, 2010, there was approximately
$1,079 of unrecognized compensation cost related to outstanding
SARs.  at cost is expected to be recognized over a weighted-average
period of 0.20 years.
e fair value of each SAR granted to employees and offi cers was
estimated on the date of grant using the Black-Scholes option-pricing
model. Expected volatilities for awards issued during the year ended
December 31, 2008 were based on the median historical stock price
volatility of insurance guideline companies and implied volatilities
from traded options on the Company’s stock.  e expected term for
grants issued during the year ended December 31, 2008 was assumed
to equal the average of the vesting period of the SARs and the full
contractual term of the SARs.  e risk-free rate for periods within
the contractual life of the option was based on the U.S. Treasury yield
curve in eff ect at the time of grant.  e dividend yield is based on
the current annualized dividend and share price as of the grant date.