In order to get the discounted price on the phone in a store/vzw.com/over the phone you have to extend your service agreement for 2 years that's if you are upgrade eligble.. It's like that for all carriers and has been that way for a very very long time..
Buy a phone off a someone call cust serv. or go into a store to get it activated = no service agreement extension.. Same goes for changing plans Verizon Wireless no longer requires you to extend your service agreement for changing price plans adding or removing features.