Unum 2015 Annual Report Download - page 151

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149
Unum 2015 Annual Report
Performance Share Units (PSUs)
Activity for PSUs classified as equity is as follows:
Shares (000s) Weighted Average Grant Date Fair Value
Outstanding at December 31, 2014 281 $30.83
Granted 226 35.13
Vested (120) 25.26
Forfeited (4) 35.03
Outstanding at December 31, 2015 383 35.05
During 2015, 2014, and 2013, we issued PSUs with a weighted average grant date fair value per share of $35.13, $34.72, and $25.26,
respectively. Vesting for the PSUs occurs at the end of a three-year period and is contingent upon our achievement of prospective company
performance goals and our total shareholder return relative to a particular peer group during the three-year period. Actual performance,
including modification for relative total shareholder return, may result in the ultimate award of 40 to 180 percent of the initial number of
PSUs issued, with the potential for no award if company performance goals are not achieved during the three-year period. Forfeitable
dividend equivalents on PSUs are accrued in the form of additional PSUs.
PSU shares in the preceding table represent aggregate initial target awards and accrued dividend equivalents and do not reflect potential
increases or decreases resulting from the performance factor determined after the end of the performance periods. At December 31, 2015,
the three-year performance period for the 2013 PSU grant was completed, but the performance factor had not yet been applied. The preceding
table includes 0.1 million vested PSUs for which the 2013 through 2015 performance factor will be applied during the first quarter of 2016,
with distribution of the stock thereafter.
At December 31, 2015, we had approximately $8.1 million of unrecognized compensation cost related to PSUs that will be recognized
over a weighted average period of 1.6 years. The estimated compensation expense is adjusted for actual performance experience and is
recognized ratably during the service period, or remaining service period, if and when it becomes probable that the performance conditions
will be satisfied. Compensation cost for PSUs subject to accelerated vesting at the date of retirement eligibility is recognized over the
implicit service period.
The fair value of PSUs is estimated on the date of initial grant using the Monte-Carlo simulation model. The assumptions used to value
PSUs granted during the years shown are as follows:
Year Ended December 31
2015 2014 2013
Expected Volatility (based on our and our peer group historical daily stock prices) 22% 31% 35%
Expected Life (equals the performance period) 3.0 years 3.0 years 3.0 years
Risk Free Interest Rate (based on U.S. Treasury yields at the date of grant) 0.91% 0.65% 0.38%