Avon 2013 Annual Report Download - page 103

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A summary of stock options as of December 31, 2013, and changes during 2013, is as follows:
Shares
(in 000’s)
Weighted-
Average
Exercise
Price
Weighted-
Average
Contractual
Term
Aggregate
Intrinsic
Value
Outstanding at January 1, 2013 26,290 $31.00
Granted – –
Exercised (1,216) 15.73
Forfeited (337) 20.94
Expired (3,194) 29.22
Outstanding at December 31, 2013 21,543 $32.27 3.5 $5.6
Exercisable at December 31, 2013 19,869 $32.73 3.2 $5.6
At December 31, 2013, there was approximately $.7 of unrecognized compensation cost related to stock options outstanding. That cost is
expected to be recognized over a weighted-average period of 0.9 years. We recognize expense on stock options using a graded vesting
method, which recognizes the associated expense based on the timing of option vesting dates.
Cash proceeds, tax benefits, and intrinsic value related to total stock options exercised during 2013, 2012 and 2011, were as follows:
2013 2012 2011
Cash proceeds from stock options exercised $19.4 $ 8.6 $16.8
Tax (obligation) benefit realized for stock options exercised (1.8) (3.7) 1.3
Intrinsic value of stock options exercised 6.4 2.2 10.0
Restricted Stock, Restricted Stock Units and Performance Restricted Stock Units
The fair value of restricted stock units and performance restricted stock units granted was determined based on the closing price of our
common stock on the date of grant.
In 2011, we granted performance restricted stock units that would vest and settle after three years only upon the satisfaction of certain
performance conditions. We accrue compensation cost if it is probable that the performance conditions will be achieved and reassess
whether achievement of the performance conditions are probable at each reporting period. In the fourth quarter of 2011, we assessed that
it is no longer probable that we would meet the specified performance conditions, and reversed the compensation cost recognized to-date.
In 2012, we granted performance restricted stock units that would vest and settle after three years only upon the satisfaction of certain
performance conditions. Several weeks after the original grant date, we amended one of these performance conditions associated with this
award. As a result, the incremental compensation cost associated with this modification totaled $.9, of which $.3 was recognized in 2012.
We have adjusted the compensation cost recognized to-date to reflect our estimated performance.
In 2013, we granted performance restricted stock units that would vest and settle after three years only upon the satisfaction of certain
performance conditions. We currently believe that the achievement of the performance conditions is probable.
A V O N 2013 F-33