Assurant 2011 Annual Report Download - page 120

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ASSURANT, INC.2011 Form10-KF-44
17 Stock Based Compensation
ere were no SARs granted during the years ended December31,
2011, 2010 and 2009. Currently there are no plans to award SARs
in the future.  e fair value of each SAR granted in prior years under
the ALTIP was estimated on the date of grant using the Black-Scholes
option-pricing model.
e compensation expense recorded related to SARs was $880, $6,553
and $10,046 for the years ended December31, 2011, 2010 and 2009,
respectively.  e related income tax bene t recognized was $308, $2,294
and $3,516 for the years ended December31, 2011, 2010 and 2009,
respectively.  e total intrinsic value of SARs exercised during the years
ended December31, 2011, 2010 and 2009 was $4,162, $1,316 and
$433, respectively. At December31, 2011, all outstanding SARs are
fully vested and expensed, so there is no unrecognized compensation
cost related to these awards.
e aggregate intrinsic value and the weighted-average remaining
contractual term of SARs outstanding and exercisable at December31,
2011 was $9,984 and 0.9 years, respectively.
Employee Stock Purchase Plan
Under the Employee Stock Purchase Plan (“ESPP”), the Company
is authorized to issue up to 5,000,000 shares to employees who are
participants in the ESPP.  e ESPP allows eligible employees to
contribute, through payroll deductions, up to 15% of their after-tax
compensation in each o ering period toward the purchase of shares of
the Company’s common stock.  ere are two o ering periods during
the year (January 1 through June30 and July1 through December31)
and shares are purchased at the end of each o ering period at 90% of
the lower of the closing price of the common stock on the  rst or last
day of the o ering period. Participants’ contributions are limited to a
maximum contribution of $7.5 per o ering period, or $15 per year.
e ESPP is o ered to individuals who are scheduled to work at least 20
hours per week and at least  ve months per year, have been continuously
employed for at least six months by the start of the o ering period, are
not temporary employees (employed less than 12 months), and have
not been on a leave of absence for more than 90 days immediately
preceding the o ering period. Participants must be employed on the
last trading day of the o ering period in order to purchase Company
shares under the ESPP.  e maximum number of shares that can be
purchased each o ering period is 5,000 shares per employee.
In July 2011, the Company issued 106,373 shares to employees at a
discounted price of $32.64 for the o ering period of January1, 2011
through June30, 2011. In July 2010, the Company issued 142,444
shares to employees at a discounted price of $27.14 for the o ering
period of January1, 2010 through June30, 2010.
In January 2012, the Company issued 103,112 shares at a discounted
price of $32.98 for the o ering period of July1, 2011 through
December31, 2011. In January 2011, the Company issued 111,414
shares at a discounted price of $31.06 for the o ering period of July1,
2010 through December31, 2010.
e compensation expense recorded related to the ESPP was $1,306,
$1,707 and $2,653 for the years ended December31, 2011, 2010
and 2009, respectively.  e related income tax bene t for disquali ed
disposition was $180, $290 and $250 for the years ended December31,
2011, 2010 and 2009, respectively.
e fair value of each award under the ESPP was estimated at the
beginning of each o ering period using the Black-Scholes option-
pricing model and the assumptions in the following table. Expected
volatilities are based on implied volatilities from traded options on the
Company’s stock and the historical volatility of the Company’s stock.
e risk-free rate for periods within the contractual life of the option
is based on the U.S. Treasury yield curve in e ect at the time of grant.
e dividend yield is based on the current annualized dividend and
share price as of the grant date.
For awards issued during the years ended December31,
2011 2010 2009
Expected volatility 27.13-32.41% 30.84-55.94% 29.46-96.42%
Risk free interest rates 0.19-0.22% 0.18-0.33% 0.28-2.12%
Dividend yield 1.64-1.85% 1.97-2.46% 0.84-1.83%
Expected term (years) 0.5 0.5 0.5
Non-Stock Based Incentive Plans
Deferred Compensation
e deferred compensation programs consist of the AIP, the ASIC
and the ADC Plans.  e AIP and ASIC Plans provided key employees
the ability to exchange a portion of their compensation for options to
purchase certain third-party mutual funds.  e AIP and ASIC Plans
were frozen in December 2004 and no additional contributions can
be made to either Plan. E ective March1, 2005 and amended and
restated on January1, 2008, the ADC Plan was established in order
to comply with the American Jobs Creation Act of 2004 (“Jobs Act”)
and IRC Section409A.  e ADC Plan provides key employees the
ability to defer a portion of their eligible compensation to be notionally
invested in a variety of mutual funds. Deferrals and withdrawals under
the ADC Plan are intended to be fully compliant with the Jobs Act
de nition of eligible compensation and distribution requirements.