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Long-term Equity-based Compensation Plans | 6 Months Ended
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Jun. 30, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Long-term Equity-based Compensation Plans | Note 5 - Long-term Equity-based Compensation Plans As of June 30, 2013, there were 8,665,088 common shares available for future grants under Kemper’s long-term equity-based compensation plan, of which 553,125 shares were reserved for future grants based on the achievement of performance goals under the terms of outstanding performance-based restricted stock awards. Equity-based compensation expense was $3.0 million and $3.3 million for the six months ended June 30, 2013 and 2012, respectively. Total unamortized compensation expense related to nonvested awards at June 30, 2013 was $7.4 million, which is expected to be recognized over a weighted-average period of 1.5 years. The Company uses the Black-Scholes option pricing model to estimate the fair value of each option on the date of grant. The assumptions used in the Black-Scholes pricing model for options granted during the six months ended June 30, 2013 and 2012 were as follows:
| Six Months Ended
| Jun 30, 2013 |  | Jun 30, 2012
Range of Valuation Assumptions |  |  |  |  |  |  |
Expected Volatility | 39.10 | % | - | 48.23 | % |  | 29.36 | % | - | 53.84 | %
Risk-free Interest Rate | 0.62 |  | - | 1.38 |  |  | 0.16 |  | - | 1.26 |
Expected Dividend Yield | 2.83 |  | - | 3.00 |  |  | 3.17 |  | - | 3.26 |
Weighted-Average Expected Life in Years |  |  |  |  |  |  |  |  |
Employee Grants | 4 |  | - | 7 |  | 1 |  | - | 7
Director Grants | 6 |  | 6
Option and stock appreciation right activity for the six months ended June 30, 2013 is presented below:
| Shares Subject to Options |  | Weighted- Average Exercise Price Per Share ($) |  | Weighted- Average Remaining Contractual Life (in Years) |  | Aggregate Intrinsic Value ($ in Millions)
Outstanding at Beginning of the Year | 3,192,054 |  |  | $ | 40.53 |  |  |  |  |
Granted | 283,750 |  |  | 33.20 |  |  |  |  |
Exercised | (74,500 | ) |  | 26.29 |  |  |  |  |
Forfeited or Expired | (473,756 | ) |  | 42.47 |  |  |  |  |
Outstanding at June 30, 2013 | 2,927,548 |  |  | $ | 39.86 |  |  | 4.20 |  | $ | 6.0 |
Vested and Expected to Vest at June 30, 2013 | 2,884,537 |  |  | $ | 40.01 |  |  | 4.14 |  | $ | 5.9 |
Exercisable at June 30, 2013 | 2,387,983 |  |  | $ | 42.04 |  |  | 3.21 |  | $ | 3.9 |
Note 5 - Long-term Equity-based Compensation Plans (continued) The weighted-average grant-date fair values of options granted during the six months ended June 30, 2013 and 2012 were $10.20 per option and $9.39 per option, respectively. Total intrinsic value of stock options exercised was $0.4 million and $0.1 million for the six months ended June 30, 2013 and 2012, respectively. The total tax benefit realized for tax deductions from option exercises was $0.2 million for the six months ended June 30, 2013. The total tax benefit realized for tax deductions from option exercises was insignificant for the six months ended June 30, 2012. Cash received from option exercises was $0.1 million for the six months ended June 30, 2013. Cash received from option exercises were insignificant for the six months ended June 30, 2012. Information pertaining to options and stock appreciation rights outstanding at June 30, 2013 is presented below:
|  |  |  | Outstanding |  | Exercisable
Range of Exercise Prices |  | Shares Subject to Options |  | Weighted- Average Exercise Price Per Share ($) |  | Weighted- Average Remaining Contractual Life (in Years) |  | Shares Subject to Options |  | Weighted- Average Exercise Price Per Share ($)
$ | 10.00 |  | - | $ | 15.00 |  |  | 35,000 |  |  | $ | 13.55 |  |  | 5.60 |  | 35,000 |  |  | $ | 13.55 |
15.01 |  | - | 20.00 |  |  | 8,000 |  |  | 16.48 |  |  | 5.85 |  | 8,000 |  |  | 16.48 |
20.01 |  | - | 25.00 |  |  | 207,500 |  |  | 23.61 |  |  | 6.59 |  | 150,062 |  |  | 23.64 |
25.01 |  | - | 30.00 |  |  | 491,250 |  |  | 28.78 |  |  | 7.81 |  | 235,873 |  |  | 28.64 |
30.01 |  | - | 35.00 |  |  | 262,750 |  |  | 33.17 |  |  | 9.63 |  | 36,000 |  |  | 31.50 |
35.01 |  | - | 40.00 |  |  | 334,000 |  |  | 37.25 |  |  | 4.27 |  | 334,000 |  |  | 37.25 |
40.01 |  | - | 45.00 |  |  | 360,618 |  |  | 43.58 |  |  | 1.12 |  | 360,618 |  |  | 43.58 |
45.01 |  | - | 50.00 |  |  | 991,722 |  |  | 48.63 |  |  | 2.31 |  | 991,722 |  |  | 48.63 |
50.01 |  | - | 55.00 |  |  | 236,708 |  |  | 50.51 |  |  | 0.86 |  | 236,708 |  |  | 50.51 |
10.00 |  | - | 55.00 |  |  | 2,927,548 |  |  | 39.86 |  |  | 4.20 |  | 2,387,983 |  |  | 42.04 |
The grant-date fair values of time-based restricted stock awards are determined using the closing price of Kemper common stock on the date of grant. Activity related to nonvested time-based restricted stock for the six months ended June 30, 2013 was as follows:
| Time-Based Restricted Shares |  | Weighted- Average Grant-Date Fair Value Per Share
Nonvested Balance at Beginning of the Year | 126,349 |  |  | $ | 26.19 |
Granted | 71,625 |  |  | 29.95 |
Vested | (17,000 | ) |  | 15.24 |
Forfeited | (22,066 | ) |  | 26.12 |
Nonvested Balance at End of Period | 158,908 |  |  | $ | 29.07 |
Note 5 - Long-term Equity-based Compensation Plans (continued) The grant-date fair values of the performance-based restricted stock awards are determined using the Monte Carlo simulation method. Activity related to nonvested performance-based restricted stock for the six months ended June 30, 2013 was as follows:
| Performance-Based Restricted Shares |  | Weighted- Average Grant-Date Fair Value Per Share
Nonvested Balance at Beginning of the Year | 187,075 |  |  | $ | 36.70 |
Granted | 70,675 |  |  | 42.12 |
Vested | (53,118 | ) |  | 33.14 |
Forfeited | (20,257 | ) |  | 38.80 |
Nonvested Balance at End of Period | 184,375 |  |  | $ | 39.57 |
The initial number of shares awarded to each participant of a performance-based restricted stock award represents the shares that would vest if the performance goals were achieved at the “target” performance level. The final payout of these awards will be determined based on Kemper’s total shareholder return over a three-year performance period relative to a peer group comprised of all the companies in the S&P Supercomposite Insurance Index. The number of additional shares that would be granted if the Company were to meet or exceed the maximum performance levels related to the outstanding performance-based shares for the 2013, 2012, and 2011 three-year performance periods was 64,975 common shares, 62,025 common shares and 57,375 common shares, respectively, at June 30, 2013. For the 2010 three-year performance period, the Company exceeded target performance levels with a payout percentage of 114%. Accordingly, an additional 6,996 shares of stock were issued to award recipients on February 2, 2013 (the “2010 Additional Shares”). The total fair value of the shares of restricted stock that vested during the six months ended June 30, 2013 and the 2010 Additional Shares that were issued was $2.6 million and the tax benefits for tax deductions realized from such shares was $0.9 million. The total fair value of the shares of restricted stock that vested during the six months ended June 30, 2012 and the additional shares that were issued in connection with the 2009 performance-based restricted stock awards was $2.8 million and the tax benefits for tax deductions realized from such shares was $1.0 million. The compensation of each member of the Board of Directors who is not employed by the Company (“Non-Employee Director”) includes equity-based compensation awards. Each new Non-Employee Director receives an initial option to purchase 4,000 shares of Kemper common stock immediately upon becoming a director. Thereafter, on the date of each annual meeting of Kemper’s shareholders, eligible Non-Employee Directors automatically receive annual grants of options to purchase 4,000 shares of common stock for so long as they remain eligible directors. Prior to May 1, 2013, such options granted to Non-Employee Directors were exercisable one year from the date of grant at an exercise price equal to the fair market value of Kemper’s common stock on the date of grant and would expire 10 years from the date of grant. Effective May 1, 2013, new grants of such options are are fully vested on the date of grant. In addition to the option awards, effective May 1, 2013, annual awards to each Non-Employee Director include 500 deferred stock units (“DSU”). DSUs give the recipient the right to receive one share of Kemper common stock for each DSU issued. The DSUs granted to Non-Employee Directors are fully vested on the date of grant. Holders of DSUs are entitled to receive dividend equivalents in cash in the amount and at the time that dividends would have been payable if the DSUs were shares of Kemper common stock. Conversion of the DSUs into shares of Kemper’s common stock is deferred until the date a director’s board service terminates. On May 1, 2013, the Company issued 4,000 DSUs at a fair value of $31.50 per DSU.

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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 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 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 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 5: 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 6: 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 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 8: 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. + Details
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