Unum 2008 Annual Report Download - page 139
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135
Nonvested Stock Awards
Nonvested share activity is summarized as follows:
Weighted Average
Shares (000s) Grant Date Fair Value
1,178 $21.65
Granted 874 23.66
Vested (521) 21.76
Forfeited (43) 22.17
1,488 22.77
Stock awards vest over a one to five year service period, beginning at the date of grant, and the compensation cost is recognized
ratably during the vesting period. Compensation cost for stock awards subject to accelerated vesting upon retirement is recognized over
the implicit service period. Forfeitable dividend equivalents on nonvested stock awards are accrued in the form of additional restricted
stock units. The weighted average grant date fair values per share for nonvested stock awards granted during 2008, 2007, and 2006
were $23.66, $21.99, and $20.95, respectively.
The total fair value of shares vested during 2008, 2007, and 2006 was $12.2 million, $20.6 million, and $12.6 million, respectively.
At December 31, 2008, we had $15.8 million of unrecognized compensation cost related to nonvested stock awards that will be recognized
over a weighted average period of 0.9 years. Prior to adoption of SFAS 123(R), this amount was reported as additional paid-in capital and
deferred compensation, a contra equity account. The value of this contra equity account at the adoption of SFAS 123(R) was $13.8 million.
Performance Restricted Stock Units (PRSUs)
PRSU activity is summarized as follows:
Weighted Average
Shares (000s) Grant Date Fair Value
1,251 $16.02
Dividends 19 19.08
Forfeited (60) 16.04
1,210 16.06
In September 2007, we issued approximately 1.25 million PRSUs with a grant date fair value of $15.99. Vesting for this grant is
contingent upon meeting various company threshold performance and stock price conditions. Forfeitable dividend equivalents on PRSUs
are accrued in the form of additional restricted stock units. The weighted average grant date fair values per share for PRSU grants and
dividends during 2008 and 2007 were $19.08 and $16.02, respectively. All PRSUs outstanding at December 31, 2008 were nonvested.
At December 31, 2008, we had $9.0 million of unrecognized compensation cost related to PRSUs that will be recognized over a weighted
average period of 1.5 years. The PRSU expense and unrecognized compensation cost assume the performance goals are attained at 100 percent.
Actual performance may result in zero to 100 percent of the units ultimately being earned. We used the accelerated method of amortization
for recognizing compensation expense, which treats each of the three vesting tranches as a separate award over the expected life of the unit.