Harley Davidson 2015 Annual Report Download - page 93

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93
The fair value of each SAR award is estimated using a lattice-based valuation model. In accordance with ASC Topic 718,
“Stock Compensation”, the fair value of each SAR award is recalculated at the end of each reporting period and the liability
and expense adjusted based on the new fair value and the percent vested.
The assumptions used to determine the fair value of the SAR awards at December 31, 2015 and 2014 were as follows:
2015 2014
Expected average term (in years) 5.3 - 7.4 3.7 - 5.4
Expected volatility 28% - 30% 25% - 31%
Expected dividend yield 2.7% 1.7%
Risk-free interest rate 0.2% - 2.3% 0.0% - 2.3%
The following table summarizes the SAR transactions for the year ended December 31, 2015 (in thousands except for per
share amounts):
SARs Weighted-Average
Price
Outstanding, beginning of period 176 $ 30
Granted 12 $ 63
Exercised (26) $ 26
Forfeited — $ —
Outstanding, end of period 162 $ 33
Exercisable, end of period 137 $ 28
The weighted-average fair value of SARs granted during the years ended December 31, 2015, 2014 and 2013 was $13,
$14 and $12, respectively.
Restricted Stock Awards Settled in Stock:
Beginning in 2014, the Company granted certain eligible U.S. employees restricted stock units (RSUs) that settle in
Company stock. Prior to 2014, the Company granted restricted, nonvested, stock. The fair value of RSUs settled in stock and
restricted stock is determined based on the market price of the Company’s shares on the grant date. The following table
summarizes the RSUs settled in stock and restricted stock transactions for the year ended December 31, 2015 (in thousands
except for per share amounts):
Restricted
Shares
Grant Date
Fair Value
Per Share
Nonvested, beginning of period 920 $ 54
Granted 472 $ 63
Vested (454) $ 53
Forfeited (88) $ 62
Nonvested, end of period 850 $ 59
As of December 31, 2015, there was $21.7 million of unrecognized compensation cost related to RSUs settled in stock
and restricted stock that is expected to be recognized over a weighted-average period of 1.7 years.
Restricted Stock Awards Settled in Cash
Restricted stock units, granted to certain eligible non-U.S. employees (RSUIs) vest under the same terms and conditions
as RSUs settled in stock and restricted stock; however, they are settled in cash equal to their settlement date fair value. As a
result, RSUIs are recorded in the Company’s consolidated balance sheets as a liability until the date of vesting.