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128 Ford Motor Company | 2013 Annual Report
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 20. SHARE-BASED COMPENSATION (Continued)
Stock Options
Stock option activity was as follows (in millions, except for weighted average exercise price):
2013 2012
Shares
Weighted-
Average
Exercise
Price Shares
Weighted-
Average
Exercise
Price
Outstanding, beginning of year 108.0 $9.14 144.4 $ 10.63
Granted 5.9 12.76 6.4 12.43
Exercised (a) (33.1)9.76 (7.6)5.70
Expired (1.6)8.26 (35.2) 16.59
Forfeited (0.1)12.80 — —
Outstanding, end of year 79.1 9.17 108.0 9.14
Exercisable, end of year 67.6 8.53 96.5 8.67
__________
(a) Exercised at option prices ranging from $1.96 to $16.49 during 2013 and option prices ranging from $1.96 to $12.49 during 2012.
The total grant date fair value of options that vested during the years ended December 31 was as follows (in millions):
2013 2012 2011
Fair value of vested options $ 41 $ 37 $ 36
We have 67.6 million fully-vested stock options, with a weighted-average exercise price of $8.53 and average
remaining term of 3.6 years. We expect 11.3 million stock options (after forfeitures), with a weighted-average exercise
price of $12.89 and average remaining term of 8.6 years, to vest in the future. The intrinsic value for vested and unvested
options was $466 million and $28 million, respectively, for the year ended December 31, 2013.
We received approximately $323 million in proceeds from the exercise of stock options in 2013. The tax benefit
realized was $11 million. An equivalent of about $511 million in new issues were used to settle exercised options. For
options exercised during the years ended December 31, 2013, 2012, and 2011, the difference between the fair value of
the Common Stock issued and the respective exercise price was $188 million, $44 million, and $54 million, respectively.
Compensation cost for stock options for the years ended December 31 was as follows (in millions):
2013 2012 2011
Compensation cost (a) $ 18 $ 26 $ 30
__________
(a) Net of tax benefit of $11 million, $16 million, and $17 million in 2013, 2012, and 2011, respectively.
As of December 31, 2013, there was about $10 million in unrecognized compensation cost related to non-vested
stock options. This expense will be recognized over a weighted-average period of 1.7 years. A summary of the status of
our non-vested shares and changes during 2013 follows (in millions, except for weighted average grant-date fair value):
Shares
Weighted-
Average Grant-
Date Fair Value
Non-vested, beginning of year 11.5 $6.79
Granted 5.9 5.03
Vested (5.8)7.04
Forfeited (0.1)5.30
Non-vested, end of year 11.5 5.78