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Stock-Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2012
Summary of Share-Based Payment Award Stock Options Valuation Assumptions

The weighted average fair value of stock options granted during the periods and the assumptions used to estimate those values using the Black-Scholes option pricing model in 2010 were as follows:

 

           2010      

Expected volatility of stock price

    54%

Risk-free interest rate

    2.82%

Expected life of options

    6 years

Dividend yield

    0.0%
Annual Activity of Stock Option Plans

The annual activity of the Company’s common stock option plans consisted of (in thousands of shares):

 

    2012     2011     2010  
    Number of
  Options  		     Weighted
Average
Exercise
Price		     Number
 of Options 		     Weighted
Average
Exercise
Price		     Number of
  Options  		     Weighted
Average
Exercise
Price		  

Balance at beginning of year

     3,432        $ 7.90         5,026        $ 7.22         7,196        $ 11.30    

Granted at fair market value

     -          -         -          -         160          11.53    

Exercised (a)

     (756)         0.86         (1,231)         0.98         (982)         8.45    

Canceled/forfeited/expired

     (775)         27.04         (363)         21.97         (1,348)         28.63    
 

 

 

      

 

 

      

 

 

    

Balance at end of year (c)

     1,901          2.89         3,432          7.90         5,026          7.22    
 

 

 

      

 

 

      

 

 

    

 

 

  (a)

Stock options exercised during 2012 and 2011 had intrinsic values of $11 million and $18 million, respectively.
  (b) 

As of December 31, 2012, the Company’s outstanding stock options had an aggregate intrinsic value of $32 million; there were 1.9 million “in-the-money” stock options; and the aggregate unrecognized compensation expense related to unvested stock options was $1 million, to be recognized over 2.1 years. Approximately 1.8 million stock options are exercisable as of December 31, 2012 and approximately 32,000 stock options are eligible to vest in 2013.
Summary of Share Based Compensation Shares Authorized Under Stock Option Plans by Exercise Price Range

The table below summarizes information regarding the Company’s outstanding stock options as of December 31, 2012 (in thousands of shares):

 

     Outstanding Options  

Range of

Exercise Prices

    Number of
        Options         		      Weighted Average
Remaining
  Contractual Life  		      Weighted
Average
  Exercise Price  		  

Less than $5.00

      1,623          6.06        $ 0.79    

$5.01 to $10.00

      -          -          -    

$10.01 to $15.00

      160          7.07          11.53    

$15.01 to $20.00

      104          0.28          18.82    

$20.01 and above

      14          1.32          30.63    
  

 

 

        
     1,901          5.80          2.89    
  

 

 

        
Summary of Share Based Payment Other than Options Valuation Assumptions

The assumptions used to estimate the fair values of the market-vesting restricted stock awards using the Monte Carlo simulation model in 2012 and 2011 were as follows:

 

             2012                   2011        

Expected volatility of stock price

    50%     48%  

Risk-free interest rate

    0.30% - 0.42%   0.47% - 1.21%

Valuation period

    2 1/2 & 3 years   3 & 4 years

Dividend yield

    0.0%     0.0%  
Annual Activity of RSUs

The annual activity related to the Company’s RSUs consisted of (in thousands of shares):

 

    2012     2011     2010  
    Number of
RSUs		     Weighted
Average
Exercise
Price		     Number
of RSUs		     Weighted
Average
Exercise
Price		     Number of
RSUs		     Weighted
Average
Exercise
Price		  

Balance at beginning of year

     2,998        $ 12.74         3,059        $ 13.64         1,855        $ 19.32    

Granted at fair market value (a)

     1,809          14.44         1,009          14.45         1,960          11.55    

Vested (b)

     (1,252)         12.61         (729)         14.41         (585)         21.89    

Canceled

     (58)         13.92         (341)         22.32         (171)         23.10    
 

 

 

      

 

 

      

 

 

    

Balance at end of year (c)

     3,497          13.64         2,998          12.74         3,059          13.64    
 

 

 

      

 

 

      

 

 

    

 

 

  (a) 

Reflects the maximum number of RSUs assuming achievement of all performance-, market- and time-vesting criteria. During 2012, 2011 and 2010, the Company granted 835,000, 652,000 and 989,000 time-based RSUs, respectively. The number of RSUs granted does not include those for non-employee directors, which are discussed separately below.
  (b) 

During 2012, approximately 615,000 market- and performance-based RSUs vested; no performance-based RSUs vested during 2011 and 2010.
  (c) 

As of December 31, 2012, the Company’s outstanding RSUs had aggregate intrinsic value of $69 million. Aggregate unrecognized compensation expense related to RSUs amounted to $25 million as of December 31, 2012, recognized over the weighted average vesting period of 1.6 years. The Company had approximately 1,439,000, 1,281,000 and 1,393,000 time-based awards outstanding at December 31, 2012, 2011 and 2010, respectively. Performance- and market-based awards outstanding at December 31, 2012, 2011 and 2010 were approximately 2,058,000, 1,717,000 and 1,666,000, respectively. Approximately 687,000 time-based, 440,000 market-based and no performance-based RSUs are eligible to vest in 2013, if applicable service and performance criteria are satisfied.