OfficeMax 2014 Annual Report Download - page 102
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Table of Contents
million unvested shares granted to employees. Of the 9 million unvested shares at year end, the Company estimates that 8.6 million shares will vest. The total
grant date fair value of shares vested during 2014 was approximately $20 million.
The Company has a performance-based long-term incentive program consisting of performance stock units. Payouts under this program are based on
achievement of certain financial targets set by the Board of Directors and are subject to additional service vesting requirements, generally of three years from
the grant date.
A summary of the activity in the performance-based long-term incentive program since inception is presented below.
2013 2012
Shares
Weighted
Average
Grant-Date
Price Shares
Weighted
Average
Grant-Date
Price
Outstanding at beginning of the year 1,030,753 $ 3.25 — $ —
Granted 4,317,314 4.55 2,073,628 3.25
Vested (261,095) 3.63 — —
Forfeited (2,010,680) 4.15 (1,042,875) 3.32
Outstanding at end of the year 3,076,292 $ 4.45 1,030,753 $ 3.25
As of December 27, 2014, there was approximately $22 million of total unrecognized compensation expense related to the performance-based long-term
incentive program. This expense, net of forfeitures, is expected to be recognized over a weighted-average period of approximately 2.2 years. Of the
6.8 million unvested shares at year end, the Company estimates that 6.2 million shares will vest. The total grant date fair value of shares vested during 2014
was approximately $6.3 million.
Pension and Other Postretirement Benefit Plans — North America
The Company has retirement obligations under OfficeMax’s U.S. pension plans (the “U.S. Plans”). The Company sponsors these noncontributory defined
benefit pension plans covering certain terminated employees, terminated vested employees, retirees and some active employees, primarily in the North
American Business Solutions Division. In 2004 or earlier, OfficeMax’s qualified pension plans were closed to new entrants and the benefits of eligible
participants were frozen. Under the terms of these qualified plans, the pension benefit for employees was based primarily on the employees’ years of service
and benefit plan formulas that varied by plan. The Company’s general funding policy is to make contributions to the plans in amounts that are within the
limits of deductibility under current tax regulations, and not less than the minimum contribution required by law.
Additionally, under previous OfficeMax arrangements, the Company has responsibility for sponsoring retiree medical benefit and life insurance plans
including plans related to operations in Canada (referred to as “Other Benefits” in the tables below). The type of retiree benefits and the extent of coverage
vary based on employee classification, date of retirement, location, and other factors. All of these postretirement medical plans are
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