OfficeMax 2012 Annual Report Download - page 116

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The Company’s executive officers, key employees and nonemployee directors are eligible to receive awards
under the 2003 Plan at the discretion of the Executive Compensation Committee of the Board of Directors. Eight
types of awards may be granted under the 2003 Plan, including stock options, stock appreciation rights, restricted
stock, restricted stock units, performance units, performance shares, annual incentive awards and stock bonus
awards.
Restricted Stock and Restricted Stock Units
Restricted stock is restricted until it vests and cannot be sold by the recipient until its restrictions have
lapsed. Each restricted stock unit (“RSU”) is convertible into one share of common stock after its restrictions
have lapsed. The Company recognizes compensation expense related to these awards over the vesting periods
based on the awards’ grant date fair values. The Company calculates the grant date fair value of the RSU awards
by multiplying the number of RSUs by the closing price of the Company’s common stock on the grant date. If
these awards contain performance criteria the grant date fair value is set assuming performance at target, and
management periodically reviews actual performance against the criteria and adjusts compensation expense
accordingly. Pre-tax compensation expense and additional paid-in capital related to restricted stock and RSU
awards was $2.2 million, $5.6 million and $8.0 million for 2012, 2011 and 2010, respectively. The remaining
compensation expense to be recognized related to outstanding restricted stock and RSUs, net of estimated
forfeitures, is approximately $0.9 million. The remaining compensation expense is to be recognized through the
first quarter of 2015.
A summary of restricted stock and RSU activity for fiscal years 2012, 2011 and 2010 is presented in the
following table:
Shares
Weighted-Average
Grant Date Fair
Value Per Share
Nonvested, December 26, 2009 ........................................ 1,929,945 $16.24
Granted ....................................................... 872,534 13.81
Vested ........................................................ (1,492) 33.70
Forfeited ...................................................... (689,852) 20.34
Nonvested, December 25, 2010 ........................................ 2,111,135 $13.89
Granted ....................................................... 648,224 12.17
Vested ........................................................ (1,047,406) 15.77
Forfeited ...................................................... (223,703) 11.64
Nonvested, December 31, 2011 ........................................ 1,488,250 $12.15
Granted ....................................................... 653,385 5.66
Vested ........................................................ (694,293) 8.97
Forfeited ...................................................... (129,586) 11.18
Nonvested, December 29, 2012 ........................................ 1,317,756 $10.70
Restricted stock and RSUs are not included as shares outstanding in the calculation of basic earnings per share,
but, except as described below, are included in the number of shares used to calculate diluted earnings per share as
long as all applicable performance criteria are met, and their effect is dilutive. In the above table, nonvested RSUs
outstanding at the end of 2012 include 96,755 and 349,229 shares of performance-based RSUs granted in 2010 and
2011, respectively, that were to be forfeited after the end of 2012 because the performance measures with the
respect to those RSUs were not met. However, nonvested RSUs outstanding at the end of 2012 in the above table,
do not include 433,460 shares of performance-based RSUs that were reserved for issuance in 2012 but associated
performance measures were not established. Therefore, they are not considered granted or outstanding. All of those
RSUs have been excluded from the number of shares used to calculate diluted earnings per share. When the
restriction lapses on restricted stock, the par value of the stock is reclassified from additional paid-in-capital to
common stock. When the restriction lapses on RSUs, the units are converted to unrestricted shares of our
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