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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
69
The following table summarizes information about Verizon’s stock
options outstanding as of December 31, 2012:
Range of
Exercise Prices
Stock Options
(in thousands)
Weighted-
Average
Remaining Life
(years)
Weighted-
Average
Exercise Price
$ 30.00-39.99 3,273 0.8 $ 34.58
40.00-49.99 45 0.3 42.99
Total 3,318 0.8 34.69
The total intrinsic value for stock options outstanding as of December
31, 2012 is not significant. The total intrinsic value of stock options exer-
cised was $0.1 billion in 2012 and the associated tax benefits were not
significant in 2012, 2011 and 2010. The amount of cash received from
the exercise of stock options was $0.3 billion in 2012, $0.2 billion in 2011
and not significant in 2010. There was no stock option expense for 2012,
2011 and 2010.
The risk-free rate is based on the U.S. Treasury yield curve in effect at
the time of the measurement date. Expected volatility was based on
a blend of the historical and implied volatility of publicly traded peer
companies for a period equal to the VARs expected life ending on the
measurement date.
The following table summarizes the Value Appreciation Rights activity:
(shares in thousands) VARs
Weighted-
Average
Grant-Date
Fair Value
Outstanding rights, January 1, 2010 16,591 $ 16.54
Exercised (4,947) 24.47
Cancelled/Forfeited (75) 22.72
Outstanding rights, December 31, 2010 11,569 13.11
Exercised (3,303) 14.87
Cancelled/Forfeited (52) 14.74
Outstanding rights, December 31, 2011 8,214 12.39
Exercised (3,427) 10.30
Cancelled/Forfeited (21) 11.10
Outstanding rights, December 31, 2012 4,766 13.89
During 2012, 2011 and 2010, we paid $0.1 billion, respectively, to settle
VARs classified as liability awards.
Stock-Based Compensation Expense
After-tax compensation expense for stock-based compensation related
to RSUs, PSUs, and VARs described above included in Net income attrib-
utable to Verizon was $0.7 billion, $0.5 billion and $0.5 billion for 2012,
2011 and 2010, respectively.
Stock Options
The Plan provides for grants of stock options to participants at an option
price per share of no less than 100% of the fair market value of Verizon
common stock on the date of grant. Each grant has a 10-year life, vesting
equally over a three-year period, starting at the date of the grant. We
have not granted new stock options since 2004.
The following table summarizes Verizon’s stock option activity:
(shares in thousands)
Stock
Options
Weighted-
Average
Exercise
Price
Outstanding, January 1, 2010 107,765 $ 44.52
Exercised (372) 34.51
Cancelled/Forfeited (50,549) 44.90
Outstanding, December 31, 2010 56,844 44.25
Exercised (7,104) 35.00
Cancelled/Forfeited (21,921) 51.06
Outstanding, December 31, 2011 27,819 41.24
Exercised (7,447) 35.20
Cancelled/Forfeited (17,054) 45.15
Outstanding, December 31, 2012 3,318 34.69
All stock options outstanding at December 31, 2012, 2011 and 2010
were exercisable.