Unum 2009 Annual Report Download - page 139

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Unum 2009 Annual Report
We use the treasury stock method to account for the effect of the purchase contract element of the units, outstanding stock options,
nonvested stock awards, and performance restricted stock units on the computation of dilutive earnings per share. Under this method,
these potential common shares will each have a dilutive effect, as individually measured, when the average market price of Unum Group
common stock during the period exceeds the threshold appreciation price of the purchase contract element of the units or the exercise
price of the stock options, the grant price of the nonvested stock awards, and/or the threshold stock price of performance restricted stock
units. For further discussion of the purchase contract element of the units and stock-based awards see Note 8 and Note 11, respectively.
The purchase contract element of the units issued in 2004 had a threshold appreciation price of $16.95 per share. The outstanding
stock options have exercise prices ranging from $11.37 to $58.56, the nonvested stock awards have grant prices ranging from $10.59 to
$26.25, and the performance restricted stock units have a threshold stock price of $26.00.
In computing earnings per share assuming dilution, only potential common shares that are dilutive (those that reduce earnings per
share) are included. Potential common shares not included in the computation of dilutive earnings per share because their impact would
be antidilutive, based on current market prices, approximated 7.1 million, 8.3 million, and 6.2 million shares of common stock for the years
ended December 31, 2009, 2008, and 2007, respectively.
Note 11. Stock-Based Compensation
Description of Stock Plans
Under the stock incentive plan of 2007, up to 35.00 million shares of common stock are available for awards to our employees, officers,
consultants, and directors. Awards may be in the form of stock options, stock appreciation rights, restricted stock, restricted stock units,
performance units, and other stock-based awards. Each full value award, defined as any award other than a stock option or stock appreciation
right, is counted as 2.7 shares.
The exercise price for stock options issued cannot be less than the fair market value of the underlying common stock as of the grant
date. Stock options have a maximum term of ten years after the date of grant and generally vest after three years. At December 31, 2009,
approximately 23.44 million shares were available for future grants.
Under the broad-based stock plan of 2002, up to 2.39 million shares of common stock were available for stock option awards to our
employees, officers, consultants, and brokers, excluding certain senior officers and directors. The plan was terminated in February 2004 for
purposes of any further grants. The stock options have a maximum term of ten years after the date of grant and generally vest after three years.
Under the broad-based stock plan of 2001, up to 2.00 million shares of common stock were available for stock option awards to our
employees, officers, consultants, and brokers, excluding certain senior officers and directors. The plan was terminated in December 2007 for
purposes of any further grants, other than reload grants, for which 20,000 shares were available at December 31, 2009. The stock options
have a maximum term of ten years after the date of grant and generally vest after three years.
Under the stock plan of 1999, comprised of the Provident Companies, Inc. stock plan of 1999 and the UnumProvident Corporation stock
plan of 1999, an aggregate of up to 17.50 million shares of common stock were available for awards to our employees, officers, brokers, and
directors. Awards could be in the form of stock options, stock appreciation rights, stock awards, dividend equivalent awards, or any other
right or interest relating to stock. The plan was terminated in May 2007 for purposes of any further grants, other than reload grants, for
which 250,000 shares were available at December 31, 2009. Stock options have a maximum term of ten years after the date of grant and
generally vest after three years.
Substantially all of our employees are eligible to participate in an employee stock purchase plan (ESPP). Under the plan, up to 3.46 million
shares of common stock are authorized for issuance, of which approximately 1.23 million remain available for issuance at December 31, 2009.
Stock may be purchased at the end of each financial quarter at a purchase price of 85 percent of the market price.
We issue new shares of common stock for nonvested stock grants, exercise of stock options, and purchase of ESPP shares.