LabCorp 2015 Annual Report Download - page 111

Index



2015
2014
2013
Fair value per option N/A
N/A
N/A
Valuation assumptions
Weighted average expected life (in years) N/A
N/A
N/A
Risk free interest rate N/A
N/A
N/A
Expected volatility N/A
N/A
N/A
Expected dividend yield N/A
N/A
N/A
The Black Scholes model incorporates assumptions to value stock-based awards. The risk-free interest rate for periods within the contractual life of the
option is based on a zero-coupon U.S. government instrument over the contractual term of the equity instrument. Expected volatility of the Company’s stock
is based on historical volatility of the Company’s stock. The Company uses historical data to calculate the expected life of the option. Groups of employees
and non-employee directors that have similar exercise behavior with regard to option exercise timing and forfeiture rates are considered separately for
valuation purposes. For 2015, 2014 and 2013, expense related to the Company’s stock option plan totaled $2.2, $6.9 and $14.5, respectively. The Company
did not grant any options to employees during 2015 or 2014.

The Company grants restricted stock, restricted stock units and performance shares (non-vested shares) to officers and key employees and grants restricted
stock and restricted stock units to non-employee directors. Restricted stock and restricted stock units typically vest annually in equal one third increments
beginning on the first anniversary of the grant. A performance share grant in 2013 represents a three-year award opportunity for the period 2013-2015, and if
earned, vests fully (to the extent earned) in the first quarter of 2016. A performance share grant in 2014 represents a three-year award opportunity for the
period of 2014-2016 and, if earned, vests fully (to the extent earned) in the first quarter of 2017. A performance share grant in 2015 represents a three-year
award opportunity for the period of 2015-2017 and, if earned, vests fully (to the extent earned) in the first quarter of 2018. Performance share awards are
subject to certain earnings per share, revenue, operating income, earnings before income taxes and total shareholder return targets, the achievement of which
may increase or decrease the number of shares which the grantee earns and therefore receives upon vesting. Unearned restricted stock and performance share
compensation is amortized to expense over the applicable vesting periods. For 2015, 2014 and 2013, total restricted stock, restricted stock unit and
performance share compensation expense was $83.8, $34.8 and $19.3, respectively.
The following table shows a summary of non-vested shares for the year ended December 31, 2015:
Number of
Shares
Weighted-Average
Grant Date
Fair Value
Non-vested at January 1, 2015 1.1
$ 91.30
Granted 0.8
123.61
Vested (0.3)
95.44
Canceled (0.1)
111.38
Non-vested at December 31, 2015 1.5
$ 109.00
As of December 31, 2015, there was $95.6 of total unrecognized compensation cost related to non-vested restricted stock, restricted stock unit and
performance share-based compensation arrangements granted under the Company's stock incentive plans. That cost is expected to be recognized over a
weighted average period of 1.9 years.

The Company has an employee stock purchase plan, begun in 1997 and amended in 1999, 2004, 2008 and 2012, with 6.3 shares of common stock
authorized for issuance. The plan permits substantially all employees to purchase a limited number of shares of Company stock at 85% of market value. The
Company issues shares to participating employees semi-annually in January and July of each year. Approximately 0.2 shares were purchased by eligible
employees in 2015, 2014 and 2013, respectively. For 2015, 2014 and 2013, expense related to the Company’s employee stock purchase plan was $4.1, $4.0
and $3.5, respectively.
F-31