MetLife, Inc. Notes to the Consolidated Financial Statements — (Continued) The binomial lattice model used by the Company incorporates different risk-free rates based on the imputed forward rates for U.S. Treasury Strips for each year over the contractual term of the option. The table below presents the full range of rates that were used for options granted during the respective periods. Dividend yield is determined based on historical dividend distributions compared to the price of the underlying Shares as of the valuation date and held constant over the life of the Stock Option. The binomial lattice model used by the Company incorporates the contractual term of the Stock Options and then factors in expected exercise behavior and a post-vesting termination rate, or the rate at which vested options are exercised or expire prematurely due to termination of employment, to derive an expected life. Exercise behavior in the binomial lattice model used by the Company is expressed using an exercise multiple, which reflects the ratio of exercise price to the strike price of Stock Options granted at which holders of the Stock Options are expected to exercise. The exercise multiple is derived from actual historical exercise activity. The post-vesting termination rate is determined from actual historical exercise experience and expiration activity under the Incentive Plans. The following table presents the weighted average assumptions, with the exception of risk-free rate, which is expressed as a range, used to determine the fair value of Stock Options issued: Performance Shares Restricted Stock Units MetLife, Inc. 174 The vast majority of Restricted Stock Units normally vest in their entirety on the third anniversary of their grant date. Other Restricted Stock Units normally vest in their entirety on the fifth anniversary of their grant date. Vesting is subject to continued service, except for employees who are retirement eligible and in certain other limited circumstances. Restricted Stock Units are units that, if they vest, are payable in an equal number of Shares. Restricted Stock Units are accounted for as equity awards, but are not credited with dividend-equivalents for actual dividends paid on Shares during the performance period. Accordingly, the estimated fair value of Restricted Stock Units is based upon the closing price of Shares on the date of grant, reduced by the present value of estimated dividends to be paid on that stock during the performance period. Performance Shares are units that, if they vest, are multiplied by a performance factor to produce a number of final Performance Shares which are payable in Shares. Performance Shares are accounted for as equity awards, but are not credited with dividend-equivalents for actual dividends paid on Shares during the performance period. Accordingly, the estimated fair value of Performance Shares is based upon the closing price of a Share on the date of grant, reduced by the present value of estimated dividends to be paid on that stock during the performance period. Performance Share awards normally vest in their entirety at the end of the three-year performance period. Vesting is subject to continued service, except for employees who are retirement eligible and in certain other limited circumstances. Vested Performance Shares are multiplied by a performance factor of 0.0 to 2.0 based on MetLife, Inc.’s adjusted income, total shareholder return, and performance in change in annual net operating earnings and total shareholder return compared to the performance of its competitors, each measured with respect to the applicable three-year performance period or portions thereof. The performance factor was 1.13 for the January 1, 2009 – December 31, 2011 performance period. Years Ended December 31, 2012 2011 2010 (In millions) Total intrinsic value of stock options exercised ......................................................... $ 29 $41 $22 Cash received from exercise of stock options ......................................................... $109 $88 $52 Income tax benefit realized from stock options exercised ................................................. $ 10 $14 $ 8 Years Ended December 31, 2012 2011 2010 Dividend yield ...................................................................... 1.95% 1.65% 2.11% Risk-free rate of return ............................................................... 0.21%-4.17% 0.29%-5.51% 0.35%-5.88% Expected volatility ................................................................... 35.59% 32.64% 34.41% Exercise multiple ................................................................... 1.58 1.69 1.75 Post-vesting termination rate .......................................................... 3.14% 3.36% 3.64% Contractual term (years) .............................................................. 10 10 10 Expected life (years) ................................................................. 7 7 7 Weighted average exercise price of stock options granted ................................... $ 37.91 $ 45.16 $ 35.06 Weighted average fair value of stock options granted ....................................... $ 11.33 $ 14.27 $ 11.29 The following table presents a summary of Stock Option exercise activity: