SHARE-BASED COMPENSATION

In year-to-date 2013, we granted 1,986,934 stock options, 728,853 restricted stock units and 388,394 performance share units. In addition, 447,961 outstanding restricted stock units and 157,386 outstanding performance share units vested during year-to-date 2013. A total of 6,783,669 shares of common stock were issued as a result of restricted stock unit vesting, performance share unit vesting and stock option exercises.

At our Annual Meeting of Shareholders held on April 11, 2013, our shareholders approved the Weyerhaeuser Company 2013 Long-Term Incentive Plan (“2013 Plan”). Shareholders approved 10 million shares of common stock for issuance under the 2013 Plan. In addition, approximately 9 million shares authorized for issuance under our 2004 Long-Term Incentive Plan that have not been issued and are not subject to outstanding awards are available for issuance under the 2013 Plan. Our Board of Directors had previously adopted and approved the 2013 Plan, subject to shareholder approval.

STOCK OPTIONS

The weighted average exercise price of all of the stock options granted in 2013 was $30.54. The vesting and post-termination vesting terms for stock options granted in 2013 were as follows:


•	options vest ratably over 4 years;


•	options vest immediately in the event of disability or death while employed;


•	options continue to vest upon retirement at an age of at least 62, but a portion of the grant is forfeited if retirement occurs before the one year anniversary of the grant depending on the number of months employed after grant date;


•	options continue vesting for one year in the event of involuntary termination when the retirement criteria has not been met; and


•	options stop vesting and are forfeited for all other situations including early retirement prior to age 62.

Weighted Average Assumptions Used in Estimating the Value of Stock Options Granted in 2013



	OPTIONS
Expected volatility	38.00		%
Expected dividends	2.23		%
Expected term (in years)	4.97
Risk-free rate	0.92		%
Weighted average grant date fair value	$	8.40

RESTRICTED STOCK UNITS

The weighted average fair value of the restricted stock units granted in 2013 was $30.54. The vesting provisions for restricted stock units granted in 2013 were as follows:


•	restricted stock units vest ratably over 4 years;


•	restricted stock units vest immediately in the event of disability or death while employed;


•	restricted stock units continue to vest upon retirement at an age of at least 62, but a portion of the grant is forfeited if retirement occurs before the one year anniversary of the grant depending on the number of months employed after grant date;


•	restricted stock units continue vesting for one year in the event of involuntary termination when the retirement criteria has not been met; and


•	restricted stock units will be forfeited upon termination of employment in all other situations including early retirement prior to age 62.

PERFORMANCE SHARE UNITS

The weighted average grant date fair value of performance share units granted in 2013 was $28.75. The vesting provisions for performance share units granted in 2013 and that are earned were as follows:


•	units vest 50 percent, 25 percent and 25 percent on the second, third and fourth anniversaries of the grant date, respectively, as long as the individual remains employed by the company;


•	units fully vest in the event of disability or death while employed;


•	units continue to vest upon retirement at an age of at least 62, but a portion of the grant is forfeited if retirement occurs before the one year anniversary of the grant depending on the number of months employed after grant date;


•	units continue vesting for one year in the event of involuntary termination when the retirement criteria has not been met; and


•	units will be forfeited upon termination of employment in all other situations including early retirement prior to age 62.

Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted in 2013



	Performance Share Units
Performance period	1/1/2013 – 12/31/2014
Valuation date closing stock price	$	30.48
Expected dividends	2.23					%
Risk-free rate	0.09		%	–	0.46	%
Expected volatility	22.09		%	–	29.57	%

STOCK APPRECIATION RIGHTS

Stock appreciation rights are remeasured to reflect the fair value at each reporting period. The following table shows the weighted average assumptions applied to all outstanding stock appreciation rights as of September 30, 2013.

Weighted Average Assumptions Used to Remeasure the Value of Stock Appreciation Rights as of September 30, 2013



	SEPTEMBER 30, 2013
Expected volatility	27.03		%
Expected dividends	3.08		%
Expected term (in years)	1.41
Risk-free rate	0.21		%
Weighted average fair value	$	6.94

There were no stock appreciation rights granted in year-to-date 2013.