Boeing 2009 Annual Report Download - page 106
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Note 15 – Share-Based Compensation and Other Compensation Arrangements
Share-Based Compensation
Our 2003 Incentive Stock Plan, as amended on April 27, 2009, permits awards of incentive stock
options, nonqualified stock options, restricted stock, stock units, Performance Shares, performance
units and other incentives to our employees, officers, consultants and independent contractors. The
aggregate number of shares of our stock available for issuance under the amended plan will not
exceed 80,000,000 and no more than an aggregate of 16,000,000 shares are available for issuance as
restricted stock awards.
Shares issued as a result of stock option exercises or conversion of stock unit awards will be funded
out of treasury shares except to the extent there are insufficient treasury shares in which case new
shares will be issued. We believe we currently have adequate treasury shares to meet any
requirements to issue shares during 2010.
Share-based plans expense is primarily included in general and administrative expense since it is
incentive compensation issued primarily to our executives. The share-based plans expense and
related income tax benefit follow:
Years ended December 31, 2009 2008 2007
Stock options $111 $119 $ 79
Restricted stock units and other awards 55 25 36
ShareValue Trust 71 61 78
Performance Shares 1494
Share-based plans expense $238 $209 $287
Income tax benefit $89 $ 79 $118
Stock Options
Options have been granted with an exercise price equal to the fair market value of our stock on the
date of grant and expire ten years after the date of grant. For stock options issued prior to 2006,
vesting is generally over a five-year service period with portions of a grant becoming exercisable at one
year, three years and five years after the date of grant. In the event an employee has a termination of
employment due to retirement, layoff, disability or death, the employee (or beneficiary) immediately
vests in grants that have been outstanding for at least one year.
On February 23, 2009, February 25, 2008, and February 26, 2007, we granted to our executives
7,423,242, 6,411,300, and 5,334,700 options, respectively, with an exercise price equal to the fair
market value of our stock on the date of grant. The stock options vest over a period of three years, with
34% vesting after the first year, 33% vesting after the second year and the remaining 33% vesting after
the third year. The options expire 10 years after the date of grant. If an executive terminates
employment for any reason, the non-vested portion of the stock option will not vest and all rights to the
non-vested portion will terminate completely.
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