Unum 2009 Annual Report Download - page 141

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139
Unum 2009 Annual Report
Stock Options
Stock option activity is summarized as follows:
Remaining Intrinsic
Shares Weighted Average Contractual Value
(000s) Exercise Price Term (000s)
Outstanding at December 31, 2008 7,441 $31.28
Granted 464 11.37
Exercised (372) 13.69
Expired (1,860) 50.14
Outstanding at December 31, 2009 5,673 24.21 1.8 years $7,641
Exercisable at December 31, 2009 4,877 $25.42 1.0 year $4,102
All outstanding stock options at December 31, 2009 are expected to vest. Stock options vest over a three year service period, beginning
at the date of grant, and the compensation cost is recognized ratably during the vesting period. The total intrinsic value of options exercised
during 2009, 2008, and 2007 was $2.6 million, $1.0 million, and $3.9 million, respectively. The total fair value of options that vested during
2009 and 2008 was $2.0 million and $0.5 million, respectively. No stock options vested in 2007. At December 31, 2009, we had $0.5 million
of unrecognized compensation cost related to stock options that will be recognized over a weighted average period of 0.9 years.
The weighted average grant date fair value of options granted during 2009, 2008, and 2007 was $4.45, $8.84, and $8.61, respectively.
We estimated the fair value on the date of grant using the Black-Scholes valuation model. The following assumptions were used to value
the 2009, 2008, and 2007 grants:
• Expected volatility of 50 percent, 43 percent, and 44 percent, respectively, based on our historical daily stock prices.
• Expected life of 5.0 years, based on historical average years to exercise.
• Expected dividend yield of 1.68 percent, 1.30 percent, and 1.57 percent, respectively, based on the dividend rate at the date of grant.
• Risk free interest rate of 1.89 percent, 2.93 percent, and 4.67 percent, respectively, based on the yield of treasury bonds at the date
of grant.
ESPP
ESPP activity is summarized as follows:
Year Ended December 31
2009 2008 2007
Number of Shares Sold 232,962 148,490 114,420
Weighted Average Exercise Price $14.94 $20.44 $24.32
Weighted Average Grant Date Fair Value $ 4.13 $ 5.72 $ 5.18