Nucor 2015 Annual Report Download - page 69

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67
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 holders of RSUs 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 date of grant. A summary
of Nucor’s restricted stock unit activity is as follows:
(shares in thousands)
Year Ended December 31, 2015 2014 2013
Shares
Grant Date
Fair Value Shares
Grant Date
Fair Value Shares
Grant Date
Fair Value
Restricted stock units:
Unvested at beginning of year 1,012 $45.98 1,122 $42.51 1,106 $40.80
Granted 790 $47.59 655 $50.63 789 $44.51
Vested (756) $44.99 (752) $44.90 (762) $42.15
Canceled (15) $46.61 (13) $42.66 (11) $39.08
Unvested at end of year 1,031 $47.93 1,012 $45.98 1,122 $42.51
Shares reserved for future grants
(stock options and RSUs) 10,349 11,851 10,486
Compensation expense for RSUs was $34.8 million in 2015 ($32.6 million in 2014 and 2013). The total fair value of shares
vested during 2015 was $35.8 million ($38.1 million in 2014 and $34.1 million in 2013). As of December 31, 2015, unrecognized
compensation expense related to unvested RSUs was $31.3 million, which is expected to be recognized over a weighted-average
period of 2.1 years.
Restricted Stock Awards Nucor’s Senior Officers Long-Term Incentive Plan (the LTIP) and Annual Incentive Plan (the AIP) authorize
the award of shares of common stock to officers subject to certain conditions and restrictions.
The LTIP provides for the award of shares of restricted common stock at the end of each LTIP performance measurement period at
no cost to officers if certain financial performance goals are met during the period. One-third of the LTIP restricted stock award vests
upon each of the first three anniversaries of the award date or, if earlier, upon the officer’s attainment of age 55 while employed by
Nucor. Although participants are entitled to cash dividends and may vote such awarded shares, the sale or transfer of such shares is
limited during the restricted period.
The AIP provides for the payment of annual cash incentive awards. An AIP participant may elect, however, to defer payment of up to
one-half of an annual incentive award. In such event, the deferred AIP award is converted into common stock units and credited with
a deferral incentive, in the form of additional common stock units, equal to 25% of the number of common stock units attributable to
the deferred AIP award. Common stock units attributable to deferred AIP awards are fully vested. Common stock units credited as a
deferral incentive vest upon the AIP participant’s attainment of age 55 while employed by Nucor. Vested common stock units are paid
to AIP participants in the form of shares of common stock following their termination of employment with Nucor.