Ford 2013 Annual Report Download - page 131

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Ford Motor Company | 2013 Annual Report 129
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 20. SHARE-BASED COMPENSATION (Continued)
The estimated fair value of stock options at the time of grant using the Black-Scholes option-pricing model was as
follows:
2013 2012 2011
Fair value per stock option $ 5.03 $5.88 $ 8.48
Assumptions:
Annualized dividend yield 3% 2% —%
Expected volatility 52.2%53.8% 53.2%
Risk-free interest rate 1.5% 1.6% 3.2%
Expected stock option term (in years) 7.7 7.2 7.1
Details on various stock option exercise price ranges as of December 31, 2013 were as follows (shares in millions):
Outstanding Options Exercisable Options
Range of Exercise Prices Shares
Weighted-
Average
Life
(years)
Weighted-
Average
Exercise
Price Shares
Weighted-
Average
Exercise
Price
$1.96 – $2.84 15.5 5.2 $ 2.16 15.5 $2.16
$5.11 – $8.58 23.2 3.1 7.29 23.2 7.29
$10.11 – $12.98 29.1 5.3 12.58 19.1 12.56
$13.07 – $16.64 11.3 2.8 13.86 9.8 13.71
Total stock options 79.1 67.6
NOTE 21. EMPLOYEE SEPARATION ACTIONS AND EXIT AND DISPOSAL ACTIVITIES
We record costs associated with voluntary separations at the time of employee acceptance, unless the acceptance
requires explicit approval by the Company. We record costs associated with involuntary separation programs when
management has approved the plan for separation, the affected employees are identified, and it is unlikely that actions
required to complete the separation plan will change significantly. When a plan of separation requires approval by or
consultation with the relevant labor organization or government, the costs are recorded after the required approval or
consultation process is complete. Costs associated with benefits that are contingent on the employee continuing to
provide service are accrued over the required service period.
Additionally, under certain labor agreements, we are required to pay transitional benefits to our employees who are
idled. For employees who will be temporarily idled, we expense the benefits on an as-incurred basis. For employees who
will be permanently idled, we expense all of the future benefits payments in the period when it is probable that the
employees will be permanently idled. Our reserve balance for these future benefit payments to permanently idled
employees takes into account several factors: the demographics of the population at each affected facility, redeployment
alternatives, estimate of benefits to be paid, and recent experience relative to voluntary redeployments.
Automotive Sector
Business Restructuring - Europe
In October 2012, we committed to commence a transformation plan for our Europe operations. As part of this plan,
we closed two manufacturing facilities in the United Kingdom in 2013 and are in the process of closing our assembly plant
in Genk, Belgium at the end of 2014. The Genk closure was subject to an information and consultation process with
employee representatives, which was completed in June 2013.
For more information visit www.annualreport.ford.com