Dow Chemical 2012 Annual Report Download - page 153
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127
Additional Information about Stock Options
In millions, except per share amounts 2012 2011 2010
Weighted-average fair value per share of options granted $ 9.38 $ 10.64 $ 9.17
Total compensation expense for stock option plans $ 106 $ 88 $ 72
Related tax benefit $ 39 $ 33 $ 27
Total amount of cash received from the exercise of options $ 137 $ 147 $ 66
Total intrinsic value of options exercised (1) $ 64 $ 66 $ 30
Related tax benefit $ 24 $ 24 $ 11
(1) Difference between the market price at exercise and the price paid by the employee to exercise the options.
Total unrecognized compensation cost related to unvested stock option awards of $53 million at December 31, 2012 is
expected to be recognized over a weighted-average period of 0.86 years.
The exercise price of each stock option equals the market price of the Company’s stock on the date of grant. Options vest
from one to three years, and have a maximum term of 10 years.
Deferred Stock
The Company grants deferred stock to certain employees. The grants vest after a designated period of time, generally two to
five years. The Company historically issued grants under the 1988 Plan; however, as of May 10, 2012, no additional grants will
be made under this plan. Beginning May 10, 2012, grants of deferred stock are made under the 2012 Plan. The following table
shows changes in nonvested deferred stock:
Deferred Stock 2012
1988 Plan 2012 Plan
Shares in thousands Shares
Grant Date
Fair Value (1) Shares
Grant Date
Fair Value (1)
Nonvested at beginning of year 15,136 $ 25.53 — $ —
Granted 3,446 $ 34.01 209 $ 30.49
Vested (7,502) $ 18.89 — $ —
Canceled (123) $ 29.70 — $ —
Nonvested at end of year 10,957 $ 32.70 209 $ 30.49
(1) Weighted-average per share
Additional Information about Deferred Stock
In millions, except per share amounts 2012 2011 2010
Weighted-average fair value per share of deferred stock granted $ 33.81 $ 37.60 $ 27.89
Total fair value of deferred stock vested and delivered (1) $ 252 $ 123 $ 38
Related tax benefit $ 93 $ 46 $ 14
Total compensation expense for deferred stock awards $ 129 $ 124 $ 123
Related tax benefit $ 48 $ 46 $ 46
(1) Includes the fair value of shares vested in prior years and delivered in the reporting year.
Total unrecognized compensation cost related to deferred stock awards of $74 million at December 31, 2012 is expected to
be recognized over a weighted-average period of 0.84 years. At December 31, 2012, approximately 124,000 deferred shares
with a grant date weighted-average fair value per share of $32.30 had previously vested, but were not issued. These shares are
scheduled to be issued to employees within one to four years or upon retirement.