Ingram Micro 2013 Annual Report Download - page 64

Table of Contents
INGRAM MICRO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In 000s, except per share data)
Fiscal Year End
2013
2012
Long-lived assets:
United States $625,719
72%
$595,949
70%
Outside of the United States 238,403
28
257,857
30
Total $864,122
100%
$853,806
100%
Note 12 — Stock-Based Compensation
Our stock-based compensation expense for 2013, 2012 and 2011 was $30,340, $27,218 and $30,811, respectively, and the related income tax benefits
were $9,161, $8,075 and $8,760, respectively.
We have elected to use the Black-Scholes option-pricing model to determine the fair value of stock options. The Black-Scholes model incorporates
various assumptions including volatility, expected life, and interest rates. The expected volatility is based on the historical volatility of our common stock over
the most recent period commensurate with the estimated expected life of our stock options. The expected life of an award is based on historical experience and
the terms and conditions of the stock-based awards granted to employees. The fair value of options granted in 2013, 2012 and 2011 was estimated assuming
no dividends and using the following weighted average assumptions:
Fiscal Year Ended
2013
2012
2011
Expected life of stock options 3.1 years
5.0 years
5.0 years
Risk-free interest rate 0.57%
0.89%
2.11%
Expected stock volatility 25.9%
34.6%
32.7%
Fair value of options granted $3.62
$5.79
$6.35
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We currently have a single stock incentive plan, the Ingram Micro Inc. 2011 Incentive Plan, for the granting of equity-based incentive awards including
incentive stock options, non-qualified stock options, restricted stock, restricted stock units and stock appreciation rights, among others, to key employees
and members of our Board of Directors. During the second quarter of 2013, our stockholders approved an amendment of the Ingram Micro Inc. 2011 Incentive
Plan (the “2011 Amended Plan”), which increased the number of shares that we may issue by 12,000. The authorized pool of shares available for grant is a
fungible pool. The authorized share limit is reduced by one share for every share subject to a stock option or stock appreciation right granted and 2.37 shares
for every share granted after June 8, 2011 (2.29 shares after June 7, 2013) under any award other than an option or stock appreciation right for awards.
We grant time- and/or performance-vested restricted stock and/or restricted stock units, in addition to stock options, to key employees and members of
our Board of Directors. Options granted generally vest over a period of up to three years and have expiration dates not longer than 10 years. In 2013, a majority
of the options granted had a contractual term of four years. A portion of the restricted stock and restricted stock units vest over a time period of one to three
years. The remainder of the restricted stock and restricted stock units vests upon achievement of certain performance measures over a time period of one to
three years. In 2013, 2012 and 2011, the performance measures for restricted stock and restricted stock units for grants to management were based on
earnings growth, return on invested capital total shareholder return and profit before tax. As of December 28, 2013, approximately 13,805 shares were
available for grant under the 2011 Amended Plan, taking into account granted options, time-vested restricted stock units/awards and performance-vested
restricted stock units assuming maximum achievement.
During 2013, 2012 and 2011 previously granted restricted stock units of 2,101, 2,132 and 1,144, respectively, were converted to Class A Common
Stock. Approximately 684, 683 and 326 shares, respectively, were withheld to satisfy the employees’ minimum statutory obligation for the applicable taxes
and cash was remitted to the appropriate taxing authorities. Total payments for the employees’ tax obligations to the taxing authorities were approximately
$13,045, $13,011 and $6,294 in 2013, 2012 and 2011, respectively. The withheld shares had the effect of share repurchases by us as they reduced and
retired the number of shares that would have otherwise been issued as a result of the vesting. Of the restricted stock and/or units that were converted to Class A
Common Stock, there were 1,535, 1,495 and 133 in 2013, 2012 and 2011, respectively, based on performance-based grants previously approved by the
Human Resources Committee of the Board of Directors. In 2011, the Human Resources Committee
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