Sallie Mae 2014 Annual Report Download - page 130

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SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
14.
Stock-Based Compensation Plans and Arrangements (Continued)
The following table summarizes RSU and PSU activity for the year ended December 31, 2014.
(Amounts in thousands, except per share data)
Number of
RSUs/
PSUs
Weighted
Average Grant
Date
Fa ir Va lue
Outstanding at December 31, 2013 ......................
1,421,007
$
16.82
Granted ............................................................
1,904,169
18.30
Vested and converted to common stock(1) .............
(750,707
)
16.83
Canceled ...........................................................
(367,684
)
17.70
Spin-Off adjustment
(2)
........................................
4,072,958
7.16
Outstanding at December 31, 2014
(3)
...................
6,279,743
$
10.95
(1) The total fair value of RSUs/PSUs that vested and converted to common stock during the
years ended December 31, 2014, 2013 and 2012 was $12,636, $6,415 and $2,656,
respectively.
(2) This represents the adjustment to preserve the intrinsic value of the outstanding equity
awards held by SLM and Navient employees.
(3) As of December 31, 2014, there was $14,506 of unrecognized compensation cost related to
RSUs net of estimated forfeitures, which is expected to be recognized over a weighted
average period of 2.3 years.
Employee Stock Purchase Plan
In the third quarter of 2014, we resumed offering the opportunity for employees to enroll in our ESPP. Employees may
purchase shares of our common stock at the end of a 12-month offering period at a price equal to the share price at the
beginning of the 12-month period, less 15 percent, up to a maximum purchase price of $7,500 (whole dollars). The purchase
price for each offering is determined at the beginning of the offering period on August 1, 2014.
The fair values of the stock purchase rights of the ESPP offerings were calculated using a Black-Scholes option pricing
model with the following weighted average assumptions.
Years Ended December 31,
(Dollars per share)
2014
2013
2012
Risk-free interest rate .................................................
0.13
%
0.15
%
0.13
%
Expected volatility .....................................................
25
%
29
%
29
%
Expected dividend rate ...............................................
—
%
3.51
%
3.27
%
Expected life of the option ..........................................
1 year
1 year
1 year
Weighted average fair value of stock purchase rights .....
$
1.66
$
2.95
$
3.01
The expected volatility is based on implied volatility from publicly traded options on our stock at the grant date and
historical volatility of our stock consistent with the expected life. The risk-free interest rate is based on the U.S. Treasury spot
rate at the grant date consistent with the expected life. The dividend yield is based on the projected annual dividend payment
per share based on the current dividend amount at the grant date divided by the stock price at the grant date.
The fair values were amortized to compensation cost on a straight-line basis over a one-year vesting period. As of
December 31, 2014, there was $118 of unrecognized compensation cost related to the ESPP net of estimated forfeitures, which
is expected to be recognized by July 2015. As our ESPP resumed in late 2014, no shares were purchased for the year ended
December 31, 2014. During the years ended December 31, 2013 and 2012, plan participants purchased 47,176 shares and
34,729 shares, respectively, of our common stock.
F-46