Nucor 2013 Annual Report Download - page 64

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The shares reserved for future grants as of December 31, 2013, 2012 and 2011 are reflected in the restricted stock units table
below. The total intrinsic value of options (the amount by which the stock price exceeded the exercise price of the option on the
date of exercise) that were exercised during 2012 and 2011 was $4.3 million and $7.6 million, respectively.
The following table summarizes information about stock options outstanding at December 31, 2013:
Options Outstanding
Exercise Price
Options
Outstanding
Options
Exercisable
Weighted-Average Remaining
Contractual Life
$35.76 741 391 8.4 years
$41.43 242 242 6.4 years
$42.34 560 299 7.4 years
$44.51 546 80 9.4 years
$35.76 – $44.51 2,089 1,012 8.2 years
As of December 31, 2013, the total aggregate intrinsic value of options outstanding and options exercisable was $27.0 million and
$13.8 million, respectively.
The grant date fair value of options granted was $15.03 in 2013 ($11.40 in 2012 and $15.37 in 2011). The fair value was estimated
using the Black-Scholes option-pricing model with the following assumptions:
2013 2012 2 011
Exercise price $44.51 $35.76 $42.34
Expected dividend yield 3.30% 4.08% 3.42%
Expected stock price volatility 46.94% 48.99% 49.40%
Risk-free interest rate 1.51% 1.06% 2.39%
Expected life (in years) 6.5 6.5 6.5
Compensation expense for stock options was $8.6 million in 2013 ($9.9 million in 2012 and $9.9 million in 2011). As of December 31,
2013, all expense related to options had been recognized as all options had vested as of December 31, 2013.
Restricted Stock Units Nucor annually grants restricted stock units (RSUs) to key employees, officers and non-employee directors.
The RSUs typically vest and are converted to common stock in three equal installments on each of the first three anniversaries of the
grant date. A portion of the RSUs awarded to senior officers vest upon the officer’s retirement. Retirement, for purposes of vesting in
these units only, means termination of employment with approval of the Compensation and Executive Development Committee of the
Board of Directors after satisfying age and years of service requirements. RSUs granted to non-employee directors are fully vested
on the grant date and are payable to the non-employee director in the form of common stock after the termination of the director’s
service on the board of directors.
RSUs granted to employees who are eligible for retirement on the date of grant are expensed immediately, and RSUs granted to
employees who will become retirement-eligible prior to the end of the vesting term are expensed over the period through which the
employee will become retirement-eligible since these awards vest upon retirement from the Company. Compensation expense for
RSUs granted to employees who are not retirement-eligible is recognized on a straight-line basis over the vesting period.
Cash dividend equivalents are paid to participants each quarter. Dividend equivalents paid on units expected to vest are recognized
as a reduction in retained earnings.
The fair value of the RSUs is determined based on the closing stock price of Nucor’s common stock on the day before the grant.
(shares in thousands)