Assurant 2010 Annual Report Download - page 111

F-41ASSURANT, INC.  2010 Form 10K
18 Stock Based Compensation
17. Common Stock
Changes in the number of common stock shares outstanding are as follows:
December 31,
2010 2009 2008
Shares outstanding, beginning 116,648,714 117,368,534 117,808,007
Vested restricted stock and restricted stock units, net (a) 227,094 78,826 58,447
Issuance to Board of Directors — — 8,466
Issuance related to ESPP 324,162 321,038 136,487
Issuance related to SARS exercise 25,046 2,366 357,127
Shares repurchased (15,224,645) (1,122,050) (1,000,000)
SHARES OUTSTANDING, ENDING 102,000,371 116,648,714 117,368,534
(a) Vested restricted stock and restricted stock units shown net of shares retired to cover participant tax liability.
 e Company is authorized to issue 800,000,000 shares of common stock. In addition, 150,001 shares of Class B and 400,001 shares of Class
C common stock, per the Restated Certifi cate of Incorporation of Assurant, Inc., are still authorized but have not been retired.
18. Stock Based Compensation
In accordance with the guidance on share based compensation, the
Company recognized stock-based compensation costs based on the
grant date fair value.  e Company also applied the “long form”
method to calculate its beginning pool of windfall tax benefi ts related
to employee stock-based compensation awards as of the adoption date
of the guidance. For the years ended December 31, 2010, 2009 and
2008, the Company recognized compensation costs net of a 5% per year
forfeiture rate on a pro-rated basis over the remaining vesting period.
Long-Term Equity Incentive Plan
In May 2008, the Company’s shareholders approved the Assurant, Inc.
Long-Term Equity Incentive Plan (“ALTEIP”), which authorized the
granting of up to 3,400,000 shares of the Company’s common stock
to employees, offi cers and non-employee directors. In May 2010, the
Company’s shareholders approved an amended and restated ALTEIP,
increasing the number of shares of the Company’s common stock
authorized for issuance to 5,300,000. Under the ALTEIP, the Company
may grant awards based on shares of its common stock, including stock
options, stock appreciation rights (“SARs”), restricted stock (including
performance shares), unrestricted stock, restricted stock units (“RSUs”),
performance share units (“PSUs”) and dividend equivalents. All future
share-based grants will be awarded under the ALTEIP.
The Compensation Committee of the Board of Directors (the
“Compensation Committee”) awarded PSUs and RSUs in 2010 and
2009. RSUs and PSUs are promises to issue actual shares of common
stock at the end of a vesting period or performance period.  e RSUs
granted to employees under the ALTEIP were based on salary grade
and performance and will vest one-third each year over a three-year
period. RSUs granted to non-employee directors also vest one-third
each year over a three-year period. RSUs receive dividend equivalents
in cash during the restricted period and do not have voting rights
during the restricted period. PSUs accrue dividend equivalents during
the performance period based on a target payout, and will be paid in
cash at the end of the performance period based on the actual number
of shares issued.
For the PSU portion of an award, the number of shares a participant
will receive upon vesting is contingent upon the Company meeting
certain pre-established performance goals, identifi ed below, at the end of
a three-year performance period. Performance for all three metrics will
be measured against a selected peer group of companies to determine
the number of shares a participant will receive.  e payout levels can
vary between 0% and 150% (maximum) of the target (100%) ALTEIP
award amount based on the Company’s level of performance against the
performance of the selected peer group of companies.
PSU Performance Goals. For 2009, the Compensation Committee
established earnings per share (“EPS”) growth, revenue growth and
total stockholder return as the three performance measures for PSU
awards. EPS growth is defi ned as the year-over-year change in GAAP net
income divided by average diluted shares outstanding. Revenue growth is
defi ned as the year-over-year change in GAAP total revenues as disclosed
in the Company’s annual statement of operations. Total stockholder’s
return is defi ned as appreciation in Company stock plus dividend yield
to stockholders. For 2010, in light of the signifi cant volatility in EPS
across the fi nancial services sector, and in response to comments from
our investors, the Committee decided to replace growth in EPS with
growth in book value per diluted share (“BVPS”) excluding AOCI as a
performance metric. BVPS growth is defi ned as year-over-year growth
of the Company’s stockholders’ equity excluding AOCI divided by
the number of fully diluted total shares outstanding at the end of the
period.  e Company believes this change will provide a more consistent
basis for comparing the Company’s long-term fi nancial performance to
that of our competitors.  e other metrics (revenue growth and total
stockholder return) remain the same for PSUs awarded in 2010. For the
2009-2011 performance cycle, the actual payout level is determined by
ranking the average of the Company’s performance with respect to all
three measures against the performance of all companies included in the
A.M. Best Insurance Index. For the 2010-2012 performance cycle, the
actual payout level is determined by ranking the average of the Company’s
three year performance with respect to all three measures against the
performance of companies included in the A.M. Best Insurance Index,
excluding those with revenues of less than $1,000,000 or that are not in
the health or insurance Global Industry Classifi cation Standard codes.
 e Company believes that this change will enable it to more accurately
benchmark its performance against the performance of companies of
comparable size that operate one or more similar businesses.