Walgreens 2015 Annual Report Download - page 110

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or payroll deductions up to certain limits. The aggregate number of shares that may be purchased under this plan
is 94 million. At August 31, 2015, 14 million shares were available for future purchase.
Restricted performance shares issued under the Omnibus Plan offer performance-based incentive awards and
equity-based awards to key employees. Restricted stock units are also equity-based awards with performance
requirements that are granted to key employees. The restricted performance shares and restricted stock unit
awards are both subject to restrictions as to continuous employment except in the case of death, normal
retirement or total and permanent disability. In accordance with ASC Topic 718, Compensation – Stock
Compensation, compensation expense is recognized based on the market price of the Company’s common stock
on the grant date and is recognized on a straight-line basis over the employee’s vesting period or to the
employee’s retirement eligible date, if earlier.
A summary of information relative to the Company’s restricted stock units follows:
Shares
Weighted-Average
Grant-Date Fair Value
Outstanding Shares
Outstanding at August 31, 2014 3,280,067 $45.40
Granted 1,157,312 66.26
Dividends 64,796 —
Forfeited (636,244) 52.68
Vested (531,479) 52.29
Outstanding at August 31, 2015 3,334,452 $50.85
Unless otherwise noted, the fair value of each performance share granted assumes that performance goals will be
achieved at 100 percent. If such goals are not met, no compensation expense is recognized and any recognized
compensation expense is reversed. A summary of information relative to the Company’s performance shares
follows:
Shares
Weighted-Average
Grant-Date Fair Value
Outstanding Shares
Outstanding at August 31, 2014 2,063,132 $ 44.85
Granted 483,174 65.31
Performance adjustment(1) (615,445) 35.30
Forfeited (444,961) 55.00
Vested (40,120) 44.00
Outstanding at August 31, 2015 1,445,780 $ 50.78
(1) Represents the adjustment to previously granted shares based on performance criteria.
The Company also issues shares to nonemployee directors. Each director receives an equity grant of shares every
year on November 1. In fiscal 2013, the number of shares granted to each director was determined by dividing
$170,000 by the price of a share of common stock on November 1, 2012. In fiscal 2014 and 2015, the number of
shares granted to each director was determined by dividing $175,000 by the price of a share of common stock on
November 1, 2013 and November 1, 2014, respectively. Each nonemployee director may elect to receive this
annual share grant in the form of shares or deferred stock units. In fiscal 2015, there were 2,725 shares granted to
nonemployee directors compared to 2,892 shares and 4,789 shares in fiscal 2014 and 2013, respectively. New
directors in any fiscal year earned a prorated amount. Payment of the annual retainer is paid in the form of cash,
which may be deferred.
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