Share-based compensation plans

12 Months Ended

Dec. 31, 2011

Share-based compensation plans [Abstract]

Share-based compensation plans

Note 15 – Share-Based Compensation Plans

We have share-based compensation plans to retain employees and nonemployee directors and to more closely align their interests with those of our shareholders.

The 2005 Equity Incentive Plan (the “2005 Plan”) permits grants of stock options, restricted stock units, stock appreciation rights, performance stock and other share-based awards to employees.

We also provide share-based awards to directors through the Non-Employee Directors' Equity Plan (the “Directors' Plan”). To date, we have granted only deferred stock units under the Directors' Plan. There are also outstanding stock options granted to directors under a prior plan, the Non-Employee Directors' Stock Option Plan (the “Prior Directors' Plan”).

There are 1.5 million shares underlying share-based plans that are authorized, but not yet granted.

General Terms

Options are granted at a price not less than the average quoted market price on the date of grant.  Options granted to employees have a maximum term of six years.  All grants of options and restricted stock units to employees under the 2005 Plan are subject to a minimum vesting period of one year and either vest ratably over three years from the date of grant or at the end of the third year.   Compensation expense related to options and restricted stock units is recognized from the grant date to the earlier of the retirement eligible date or the stated vesting date, and is classified as selling, general and administrative expenses in the consolidated statements of income. 

In general, options continue to be exercisable following termination of employment for 90 days, if such options were exercisable at the time of termination.  Upon termination of employment by reason of the employee's retirement or permanent and total disability, options held by the employee remain outstanding and continue in accordance with their terms. In the event of the employee's death while employed or after retirement or permanent and total disability, options held by the employee fully vest at the time of the employee's death (or, if later, on the first anniversary of the grant date) and remain exercisable by the employee's beneficiary or estate for three years following the employee's death or their earlier expiration in accordance with their terms.  If a change in control were to occur (as defined in the plan document), all outstanding options fully vest and become exercisable.

Restricted stock unit awards granted under the 2005 Plan have specific terms and conditions contained in award agreements entered into with employees.  In general, restricted stock units are canceled following termination of employment.  Upon termination of employment by reason of the employee's retirement or permanent and total disability, restricted stock units held by the employee remain outstanding and continue in accordance with their terms. In the event of the employee's death while employed or after retirement or permanent and total disability, any restrictions on restricted stock units held by the employee are removed at the time of the employee's death (or, if later, on the first anniversary of the grant date).  If a change in control were to occur, all restrictions on outstanding restricted stock units are removed, subject to limitations on distribution imposed by Internal Revenue Code Section 409A.

Under the Prior Directors' Plan, options granted had a maximum term of ten years and vested in full at the end of six months.  Under the Directors' Plan, directors have been granted deferred stock units that entitle them (at the earlier of one year from the date of grant, upon termination of service from the board or upon a change on control) to receive an equivalent amount of Brink's common stock six months after termination of service from the board.  Compensation cost for deferred stock units is recognized in its entirety at the grant date. 

Option Activity

The table below summarizes the activity in all plans for options of our common stock.

Option Activity

The table below summarizes the activity in all plans for options of our common stock.

							Weighted-Average			Aggregate
		Shares			Weighted- Average		Remaining Contractual			Intrinsic Value
		(in thousands)			Exercise Price Per Share		Term (in years)			(in millions)
Outstanding at December 31, 2008		3,322		$	28.95
Granted		289			27.59
Exercised		(79)			16.50
Forfeited or expired		(97)			34.08
Outstanding at December 31, 2009		3,435			28.98
Granted		367			19.05
Exercised		(372)			17.50
Forfeited or expired		(75)			31.71
Outstanding at December 31, 2010		3,355			29.10
Granted		290			31.47
Exercised		(562)			20.66
Forfeited or expired		(116)			29.47
Outstanding at December 31, 2011
			2,967		$	30.92		2.5		$	3.0
Of the above, as of December 31, 2011:
	Exercisable	2,397		$	32.03		1.9		$	1.4
	Expected to vest in future periods (a)	555		$	26.18		4.8		$	1.6

(a)       The number of options expected to vest takes into account an estimate of expected forfeitures.

The intrinsic value of a stock option is the difference between the market price of the shares underlying the option and the exercise price of the option. The market price at December 31, 2011, was $26.88 per share. The total intrinsic value of options exercised was $5.6 million ($9.99 per share) in 2011, $2.9 million ($7.86 per share) in 2010, and $0.9 million ($11.62 per share) in 2009. The total fair value of options that vested during 2011 was $3.2 million, during 2010 was $5.1 million, and during 2009 was $6.7 million.

There were 2.4 million shares of exercisable options with a weighted-average exercise price of $32.03 per share at December 31, 2011. There were 2.6 million shares of exercisable options with a weighted-average exercise price of $30.10 per share at December 31, 2010, and 2.4 million shares of exercisable options with a weighted-average exercise price of $27.41 per share at December 31, 2009.

Method and Assumptions Used to Estimate Fair Value of Options

The fair value of each stock option grant is estimated at the time of grant using the Black-Scholes option-pricing model. For those awards subject to a ratable vesting schedule, fair value is measured for each separately vesting portion of the award as if the award were comprised of three separate individual awards.

The fair value of options granted during the three years ended December 31, 2011, was calculated using the following estimated weighted-average assumptions.

Options Granted

				Years Ended December 31,
				2011			2010			2009
Number of shares underlying options, in thousands						290			367			289
Weighted-average exercise price per share			$			31.47			19.05			27.59
Assumptions used to estimate fair value
	Expected dividend yield (a):
		Weighted-average				1.3%			2.1%			1.4%
	Expected volatility (b):
		Weighted-average				36%			36%			36%
		Range		36%	–	37%	35%	–	39%	35%	–	39%
	Risk-free interest rate (c):
		Weighted-average				1.2%			1.4%			1.8%
		Range		0.5%	–	1.9%	0.6%	–	1.9%	0.9%	–	2.4%
	Expected term in years (d):
		Weighted-average				3.8			3.8			3.8
		Range		1.9	–	5.3	1.9	–	5.3	1.9	–	5.3
Weighted-average fair value estimates at grant date:
	In millions		$			2.4			1.7			2.1
	Fair value per share		$			8.17			4.65			7.24

(a) The expected dividend yield is the calculated yield on Brink's common stock at the time of the grant.

(b)       The expected volatility was estimated after reviewing the historical volatility of our stock using daily close prices.

(c)       The risk-free interest rate was based on U.S. Treasury debt yields at the time of the grant.

(d)       The expected term of the options was based on historical option exercise, expiration and post-vesting cancellation behaviors.

Nonvested Share Activity
		Number of shares				Weighted-Average
		2005	Directors’			Grant-Date
(in thousands of shares, except per share amounts)		Plan	Plan	Total		Fair Value (a)
Balance as of January 1, 2009		55.6	15.3	70.9	$	36.27
Granted		178.4	22.7	201.1		26.90
Cancelled awards		(1.3)	-	(1.3)		26.80
Vested		(18.5)	(15.3)	(33.8)		35.71
	Balance as of December 31, 2009	214.2	22.7	236.9		28.45
Granted		167.6	29.1	196.7		19.24
Cancelled awards		(5.6)	-	(5.6)		22.52
Vested		(76.7)	(22.7)	(99.4)		29.12
	Balance as of December 31, 2010	299.5	29.1	328.6		22.84
Granted		143.7	15.8	159.5		30.43
Cancelled awards		(16.5)	-	(16.5)		23.65
Vested		(127.1)	(29.1)	(156.2)		24.13
	Balance as of December 31, 2011	299.6	15.8	315.4	$	25.99

• Fair value is measured at the date of grant based on the average of the high and low per share quoted sales price of Brink's common stock, adjusted for a discount on units that do not receive or accrue dividends.

As of December 31, 2011, $0.9 million of total unrecognized compensation cost related to previously granted stock options is expected to be recognized over a weighted-average period of 1.5 years.

Other Share-Based Compensation

We have a deferred compensation plan that allows participants to defer a portion of their compensation into common stock units. Units may be redeemed by employees for an equal number of shares of Brink's common stock. Employee accounts held 947,878 units at December 31,2011, and 869,745 units at December 31, 2010.

We have a stock accumulation plan for our non-employee directors denominated in Brink's common stock units. Directors' accounts held 55,293units at December 31, 2011, and 50,619 units at December 31, 2010.