The Hartford 2011 Annual Report Download - page 225

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
F-90
18. Stock Compensation Plans (continued)
A summary of the status of the Company’ s non-vested awards under the Deferred Stock Unit Plan as of December 31, 2011, is
presented below:
Non-vested Units
Restricted Units
(in thousands)
Weighted-Average
Grant-Date Fair Value
Non-vested at beginning of year
648
$
24.70
Granted
—
—
Vested
(49)
24.27
Forfeited
(108)
24.31
Non-vested at end of year
491
$
24.84
Employee Stock Purchase Plan
In 1996, the Company established The Hartford Employee Stock Purchase Plan (“ESPP”). Beginning in 2010 under this plan, eligible
employees of The Hartford purchased common stock of the Company at a discount rate of 5% of the market price per share on the last
trading day of the offering period. In 2009 and prior years, eligible employees of The Hartford purchased common stock of the
Company at a 15% discount from the lower of the closing market price at the beginning or end of the offering period. Employees
purchase a variable number of shares of stock through payroll deductions elected as of the beginning of the offering period. The
Company may sell up to 15,400,000 shares of stock to eligible employees under the ESPP. As of December 31, 2011, there were
6,472,280 shares available for future issuance. During the years ended December 31, 2011, 2010 and 2009, 768,380, 729,598, and
2,557,893 shares were sold, respectively. The weighted average per share fair value of the discount under the ESPP was $1.03, $1.24
and $5.99 during the years ended December 31, 2011, 2010 and 2009, respectively. In 2011 and 2010, the fair value is estimated based
on the 5% discount off the market price per share on the last trading day of the offering period. In 2009 and prior years, the fair value
was estimated based on the 15% discount off of the beginning stock price plus the value of six-month European call and put options on
shares of stock at the beginning stock price calculated using the Black-Scholes model and the following weighted average valuation
assumptions:
For the year ended
December 31,
2009
Dividend yield
1.4%
Implied volatility
91.4%
Risk-free spot rate
0.3%
Expected term
6 months
Implied volatility was derived from exchange-traded options on the Company’ s stock. The risk-free rate is based on the U.S. Constant
Maturity Treasury yield curve in effect at the time of grant. The total intrinsic value of the discounts at purchase was $5 for the year
ended December 31, 2009. Additionally, The Hartford has established employee stock purchase plans for certain employees of the
Company’ s international subsidiaries. Under these plans, participants may purchase common stock of The Hartford at a fixed price.
The activity under these programs is not material.