Nucor 2015 Annual Report Download - page 67

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Nucor has been named, along with other major steel producers, as a co-defendant in several related antitrust class-action complaints
filed by Standard Iron Works and other steel purchasers in the United States District Court for the Northern District of Illinois. The
majority of these complaints were filed in September and October of 2008, with two additional complaints being filed in July and
December of 2010. Two of these complaints have been voluntarily dismissed and are no longer pending. The plaintiffs allege that
from April 1, 2005, through December 31, 2007, eight steel manufacturers, including Nucor, engaged in anticompetitive activities with
respect to the production and sale of steel. The plaintiffs seek monetary and other relief on behalf of themselves and a putative class
of all purchasers of steel products from the defendants in the U.S. between April 1, 2005, and December 31, 2007. Five of the eight
defendants have reached court approved settlements with the plaintiffs. On September 9, 2015, the District Court entered an order
ruling on issues of class certification. The Court granted in part, and denied in part, the plaintiffs’ motion, certifying a class solely on
the issue of whether defendants engaged in a conspiracy in violation of the antitrust laws, and declining to certify a class on the issues
of antitrust impact and damages. We continue to believe the plaintiffs’ claims are without merit and will continue to vigorously defend
against them, but we cannot at this time predict the outcome of this litigation or estimate the range of Nucor’s potential exposure and,
consequently, have not recorded any reserves or contingencies related to this lawsuit.
On March 25, 2014, a jury in the U.S. District Court for the Southern District of Texas returned a verdict against Nucor and its
co-defendants in an antitrust lawsuit brought by plaintiff MM Steel, LP, a steel plate service center located in Houston. The jury
returned a verdict of $52.0 million in damages against all defendants jointly and severally. On June 1, 2014, pursuant to antitrust laws
providing for treble damages, the court awarded a judgment to MM Steel jointly and severally against the defendants in an amount
totaling $160.8 million after including costs and attorneys’ fees. As a result of post-verdict developments, including settlements
reached by various other parties, the Company’s practical estimable exposure was reduced to approximately $40.0 million. The
Company appealed the judgment to the U.S. Court of Appeals for the Fifth Circuit, and on November 25, 2015, the Fifth Circuit
reversed the verdict against Nucor finding that there was not sufficient evidence to support liability against the Company, thereby
reducing our current practical estimate exposure to zero.
We are from time to time a party to various other lawsuits, claims and legal proceedings that arise in the ordinary course of business.
With respect to all such lawsuits, claims and proceedings, we record reserves when it is probable a liability has been incurred and the
amount of loss can be reasonably estimated. We do not believe that any of these proceedings, individually or in the aggregate, would
be expected to have a material adverse effect on our results of operations, financial position or cash flows. Nucor maintains liability
insurance for certain risks that is subject to certain self-insurance limits.
17. STOCK-BASED COMPENSATION
Stock Options Stock options may be granted to Nucor’s key employees, officers and non-employee directors with exercise prices
at 100% of the market value on the date of the grant. The stock options granted are generally exercisable at the end of three years
and have a term of 10 years. New shares are issued upon exercise of stock options.
A summary of activity under Nucor’s stock option plans is as follows:
(shares in thousands)
Year Ended December 31, 2015 2014 2013
Shares
Weighted-
Average
Exercise
Price Shares
Weighted-
Average
Exercise
Price Shares
Weighted-
Average
Exercise
Price
Number of shares under option:
Outstanding at beginning of year 2,422 $42.39 2,089 $40.47 1,543 $39.03
Granted 700 $47.59 469 $50.63 546 $44.51
Exercised (10) $42.34 (136) $41.30 — —
Canceled (20) $50.63 — — — —
Outstanding at end of year 3,092 $43.51 2,422 $42.39 2,089 $40.47
Options exercisable at end of year 1,531 $39.35 1,263 $40.40 1,012 $39.75