Xerox 2012 Annual Report Download - page 110

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Notes to Consolidated Financial Statements
(in millions, except per-share data and where otherwise noted)
108
Assumptions Pre-August 2009 Options August 2009 Options
Strike price $ 6.89 $ 6.33
Expected volatility 37.90% 38.05%
Risk-free interest rate 0.23% 1.96%
Dividend yield 1.97% 1.97%
Expected term 0.75 years 4.2 years
The total intrinsic value and actual tax benefit realized for vested and exercised stock-based awards was as follows:
December 31, 2012 December 31, 2011 December 31, 2010
Total Total Total
Intrinsic Cash Tax Intrinsic Cash Tax Intrinsic Cash Tax
Awards Value Received Benefit Value Received Benefit Value Received Benefit
Restricted Stock Units $ 117 $ – $ 33 $ 56 $ – $ 22 $ 31 $ – $ 10
Performance Shares – – – 17 – 6 12 – 5
Stock Options 12 44 4 18 44 7 155 183 56
No Performance Shares vested in 2012 since the 2009 primary award grant that normally would have vested in 2012 was replaced with a grant of
Restricted Stock Units with a market based condition and therefore were accounted and reported for as part of Restricted Stock Units.
ACS Acquisition
In connection with the acquisition of ACS (see Note 3 – Acquisitions for
additional information), outstanding ACS options were converted into
96,662 thousand Xerox options. The Xerox options have a weighted
average exercise price of $6.79 per option. The estimated fair value
associated with the options issued was approximately $222 based on a
Black-Scholes valuation model utilizing the assumptions stated below.
Approximately $168 of the estimated fair value is associated with ACS
options issued prior to August 2009, which became fully vested and
exercisable upon the acquisition in accordance with preexisting change-
in-control provisions, and was recorded as part of the acquisition fair
value. The remaining $54 is associated with ACS options issued in
August 2009 which did not fully vest and become exercisable upon
the acquisition, but continue to vest according to specified vesting
schedules and, therefore, is being expensed as compensation cost over
the remaining vesting period. The options generally expire 10 years
from date of grant. 33,693 thousand Xerox options issued upon this
conversion remain outstanding at December 31, 2012.