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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2012
Stock-Based Compensation |
Stock-Based Compensation | 13. STOCK-BASED COMPENSATION USEC has stock-based compensation plans available to grant restricted stock, restricted stock units, non-qualified stock options, performance awards and other stock-based awards to key employees and non-employee directors. A summary of stock-based compensation costs follows (in millions):
|  | Years Ended December 31, |
|  | 2012 |  |  | 2011 |  |  | 2010 |
Total stock-based compensation costs: |  |  |  |  |  |  |  |  |
Restricted stock and restricted stock units |  | $ | 4.4 |  |  | $ | 7.1 |  |  | $ | 7.4 |
Stock options, performance awards and other |  |  | 0.8 |  |  |  | 1.3 |  |  |  | 1.9 |
Less: costs capitalized as part of inventory |  |  | (0.1 | ) |  |  | (0.4 | ) |  |  | (0.3 | )
Expense included in selling, general and administrative and special charges |  | $ | 5.1 |  |  | $ | 8.0 |  |  | $ | 9.0 |
Total recognized tax benefit |  | $ | - |  |  | $ | - |  |  | $ | 3.2 |
As of December 31, 2012, there was $2.5 million of unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested stock-based payments granted, of which $2.4 million relates to restricted shares and restricted stock units, and $0.1 million relates to stock options. That cost is expected to be recognized over a weighted-average period of 1.5 years. Of the 7.5 million shares of common stock approved by stockholders for issuance under USEC's equity incentive plans, there were approximately 2,830,000 shares available for future awards under the plans at December 31, 2012 (excluding outstanding awards which terminate or are cancelled without being exercised or that are settled for cash), all of which are available for grants of stock options, restricted stock or restricted stock units, performance awards and other stock-based awards. USEC's practice is to issue shares under stock-based compensation plans from treasury stock. The employee stock purchase plan was discontinued effective February 15, 2012. Restricted Stock Units and Restricted Stock Under the long-term incentive program, annual grants of restricted stock were awarded in 2012 that vest ratably over three years from the date of grant. No performance-based grants of restricted stock were awarded in 2012 since USEC's total shareholder return in 2012 was below the 25 th percentile of the Russell 2000 total shareholder return (without dividends) which was the minimum threshold performance target to earn an award. Performance-based grants of restricted stock are measured for probability each quarter and recorded as a liability if deemed probable. Performance-based grants of restricted stock, subject to being earned, vest over three years. Non-employee directors are granted restricted stock units as part of their compensation for serving on the Board of Directors which may only be settled in USEC stock. The restricted stock units vest over one or three years, however, vesting is accelerated upon (1) the director attaining eligibility for retirement, (2) termination of the director's service by reason of death or disability, or (3) a change in control. Settlement of restricted stock units granted to non-employee directors is made in shares of USEC stock upon the director's retirement or other end of service. The fair value of restricted stock is determined based on the closing price of USEC's common stock on the grant date. Compensation cost for restricted stock is amortized to expense on a straight-line basis over the three-year vesting period. Sale of such shares is restricted prior to the date of vesting. A summary of restricted shares activity for the year ended December 31, 2012 follows (shares in thousands):
|  |  |  |  | Weighted-Average |
|  |  |  |  | Grant-Date |
|  | Shares |  |  | Fair Value |
Restricted Shares at December 31, 2011 |  |  | 1,914 |  |  | $ | 4.61 |
Granted |  |  | 2,316 |  |  |  | 0.81 |
Vested |  |  | (1,539 | ) |  |  | 4.03 |
Forfeited |  |  | - |  |  |  | - |
Restricted Shares at December 31, 2012 |  |  | 2,691 |  |  | $ | 1.67 |
Stock Options The intrinsic value of an option, if any, represents the excess of the fair value of the common stock over the exercise price. The fair value of stock option awards is estimated using the Black-Scholes option pricing model, which includes a number of assumptions including USEC's estimates of stock price volatility, employee stock option exercise behaviors, future dividend payments, and risk-free interest rates. The expected term of options granted is the estimated period of time from the beginning of the vesting period to the date of expected exercise or other settlement, based on historical exercises and post-vesting terminations. Future stock price volatility is estimated based on historical volatility for the recent period equal to the expected term of the options. The risk-free interest rate for the expected option term is based on the U.S. Treasury yield curve in effect at the time of grant. No cash dividends are expected in the foreseeable future and therefore an expected dividend yield of zero is used in the option valuation model. Historical data are used to estimate pre-vesting option forfeitures at the time of grant. Estimates for option forfeitures are revised in subsequent periods if actual forfeitures differ from those estimates. Compensation expense is recognized for stock option awards that are expected to vest. Assumptions used to value option grants follow:
| Years Ended December 31,
| 2012 | 2011 | 2010
Risk-free interest rate | - - |  | - - |  | 0.78 - | - 1.43%
Expected volatility | - - |  | - - |  | 72 - | - 75%
Expected option life (years) | - - |  | - - |  | 4.0 - | - 4.1
Weighted-average grant date fair value | - | - | $2.81
Options granted | 0 | 0 | 773,018
Stock options vest or become exercisable in equal annual installments over a three year period and expire 5 or 10 years from the date of grant. A summary of stock option activity follows:
|  |  |  |  |  |  |  | Weighted-Average |  |  |  |
|  | Stock |  |  | Weighted- |  |  | Remaining |  |  | Aggregate |
|  | Options |  |  | Average |  |  | Contractual |  |  | Intrinsic Value |
|  | (thousands) |  |  | Exercise Price |  |  | Term (years) |  |  | (millions) |
Outstanding at December 31, 2011 |  |  | 3,126 |  |  | $ | 5.61 |  |  |  |  |  |  |
Granted |  |  | - |  |  |  | - |  |  |  |  |  |  |
Exercised |  |  | - |  |  |  | - |  |  |  |  |  |  |
Forfeited or expired |  |  | (348 | ) |  |  | 10.90 |  |  |  |  |  |  |
Outstanding at December 31, 2012 |  |  | 2,778 |  |  | $ | 4.95 |  |  |  | 1.2 |  |  | $ | - |
Exercisable at December 31, 2012 |  |  | 2,554 |  |  | $ | 4.93 |  |  |  | 1.1 |  |  | $ | - |
There were 115,630 stock options exercised in 2010. Cash received from the exercise of the options was $0.5 million. The intrinsic value of the options exercised was $0.2 million. There were no stock options exercised in 2012 or 2011. Stock options outstanding and options exercisable at December 31, 2012, follow (options in thousands):
Stock Exercise Price |  |  | Options Outstanding |  |  | Weighted Average Remaining Contractual Life in Years |  |  | Options Exercisable |
$ | 3.72 |  |  |  | 1,069 |  |  |  | 1.3 |  |  |  | 1,069 |
5.00 to 6.18 |  |  |  | 1,600 |  |  |  | 1.2 |  |  |  | 1,376 |
7.00 to 14.28 |  |  |  | 109 |  |  |  | 0.7 |  |  |  | 109 |
|  |  |  |  | 2,778 |  |  |  | 1.2 |  |  |  | 2,554 |
On January 10, 2013 the Compensation Committee of the Board of Directors approved the surrender and cancellation of 2,462,726 unexercised stock options and suspended the Annual Incentive Program and the Long Term Incentive Program for 2013 under the USEC Inc. 2009 Equity Incentive Plan. Employee Stock Purchase Plan The employee stock purchase plan was discontinued effective February 15, 2012. Under the employee stock purchase plan, participating employees could elect to designate up to 10% of their compensation to purchase shares of USEC Inc. common stock at 85% of the market price at the end of the six-month offering period. Compensation costs for the discounts provided under the plan were $0.1 million in both 2011 and 2010. Employees purchased approximately 248,000 shares in 2011 and approximately 116,000 shares in 2010.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 93-6 -Paragraph 53 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 123R -Paragraph 64, 65, A240 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
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