Canon 2013 Annual Report Download - page 81

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 79
15. STOCK-BASED COMPENSATION
On May 1, 2011, based on the approval of the stockholders,
the Company granted stock options to its directors, execu-
tive officers and certain employees to acquire 912,000 shares
of common stock. These option awards vest after two years
of continued service beginning on the grant date and have a
four year contractual term. The grant-date fair value per share
of the stock options granted during the year ended December
31, 2011 was ¥772.
On May 1, 2010, based on the approval of the stockhold-
ers, the Company granted stock options to its directors, execu-
tive officers and certain employees to acquire 890,000 shares
of common stock. These option awards vest after two years
of continued service beginning on the grant date and have a
four year contractual term. The grant-date fair value per share
of the stock options granted during the year ended December
31, 2010 was ¥988.
On May 1, 2009, based on the approval of the stockhold-
ers, the Company granted stock options to its directors, execu-
tive officers and certain employees to acquire 954,000 shares
of common stock. These option awards vest after two years
of continued service beginning on the grant date and have a
four year contractual term. The grant-date fair value per share
of the stock options granted during the year ended December
31, 2009 was ¥699.
On May 1, 2008, based on the approval of the stockhold-
ers, the Company granted stock options to its directors, execu-
tive officers and certain employees to acquire 592,000 shares
of common stock. These option awards vest after two years
of continued service beginning on the grant date and have a
four year contractual term. The grant-date fair value per share
of the stock options granted during the year ended December
31, 2008 was ¥1,247.
The compensation cost recognized for these stock options
for the years ended December 31, 2013, 2012 and 2011 was
¥95 million ($905 thousand), ¥364 million and ¥748 million,
respectively, and is included in selling, general and adminis-
trative expenses in the consolidated statements of income.
The fair value of each option award was estimated on the date of grant using the Black-Scholes option pricing model that
incorporates the assumptions presented below:
Years ended December 31 Thousands of U.S. dollars
Before-tax
amount
Tax (expense)
or benefit
Net-of-tax
amount
2013:
Foreign currency translation adjustments
$ 2,416,257 $ (20,295) $ 2,395,962
Net unrealized gains and losses on securities:
Amount arising during the year
120,657 (41,067) 79,590
Reclassification adjustments for gains and losses realized in net income (22,457) 5,838 (16,619)
Net change during the year 98,200 (35,229) 62,971
Net gains and losses on derivative instruments:
Amount arising during the year
(115,667) 43,753 (71,914)
Reclassification adjustments for gains and losses realized in net income 146,543 (55,048) 91,495
Net change during the year 30,876 (11,295) 19,581
Pension liability adjustments:
Amount arising during the year
493,904 (205,847) 288,057
Reclassification adjustments for gains and losses realized in net income 32,952 (9,876) 23,076
Net change during the year 526,856 (215,723) 311,133
Other comprehensive income (loss) $ 3,072,189 $ (282,542) $ 2,789,647
Year ended December 31 2011
Expected term of option (in years) 4.0
Expected volatility 36.44%
Dividend yield 3.16%
Risk-free interest rate 0.44%