Nucor 2011 Annual Report Download - page 57

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The shares reserved for future grants as of December 31, 2011, 2010 and 2009 are reflected in the restricted stock units table below.
The total intrinsic value of options (the amount by which the stock price exceeded the exercise price of the option on the date of
exercise) that were exercised during 2011 was $7.6 million ($8.5 million in 2010 and $7.0 million in 2009).
The following table summarizes information about stock options outstanding at December 31, 2011:
(shares in thousands)
Options Outstanding Options Exercisable
Range of Exercise Prices
Number
Outstanding
Weighted-
Average
Remaining
Contractual Life
Weighted-
Average
Exercise Price
Number
Exercisable
Weighted-
Average
Exercise Price
$25.00 – $30.00 201 0.7 years $28.86 201 $28.86
30.01 – 35.00 153 0.2 years $30.73 153 $30.73
35.01 – 40.00 — — — — —
40.01 – 42.34 802 9.1 years $42.07 — —
$25.00 – $42.34 1,156 6.5 years $38.26 354 $29.67
As of December 31, 2011, the total aggregate intrinsic value of both options outstanding and options exercisable was $3.5 million.
Options for which the exercise price exceeded the closing market price of a share of the Company’s common stock at December 31,
2011 were excluded from the calculation of aggregate intrinsic value.
The grant date fair value of options granted was $15.37 in 2011 ($15.50 in 2010). The fair value was estimated using the Black-
Scholes option-pricing model with the following assumptions:
2011 2010
Exercise price $42.34 $41.43
Expected dividend yield 3.42% 3.48%
Expected stock price volatility 49.40% 50.58%
Risk-free interest rate 2.39% 2.75%
Expected life (in years) 6.5 6.5
Compensation expense for stock options was $9.9 million in 2011 ($0.7 in 2010 and none in 2009). As of December 31, 2011,
unrecognized compensation expense related to options was $1.8 million, which is expected to be recognized over 1.4 years.
Restricted Stock Units Nucor annually grants restricted stock units (RSUs) to key employees, officers and non-employee directors.
The RSUs typically vest and are converted to common stock in three equal installments on each of the first three anniversaries of the
grant date. A portion of the RSUs awarded to senior officers vest upon the officer’s retirement. Retirement, for purposes of vesting in
these units only, means termination of employment with approval of the Compensation and Executive Development Committee of the
Board of Directors after satisfying age and years of service requirements. RSUs granted to non-employee directors are fully vested on
the grant date and are payable to the non-employee director in the form of common stock after the termination of the director’s service
on the board of directors.
RSUs granted to employees who are eligible for retirement on the date of grant are expensed immediately, and RSUs granted to
employees who will become retirement-eligible prior to the end of the vesting term are expensed over the period through which the
employee will become retirement-eligible since these awards vest upon retirement from the Company. Compensation expense for RSUs
granted to employees who are not retirement-eligible is recognized on a straight-line basis over the vesting period.
Cash dividend equivalents are paid to participants each quarter. Dividend equivalents paid on units expected to vest are recognized as
a reduction in retained earnings.
The fair value of the RSUs is determined based on the closing stock price of Nucor’s common stock on the day before the grant.