Boeing 2009 Annual Report Download - page 108

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On February 23, 2009, we granted to our executives 2,144,501 RSUs as part of our long-term
incentive program, with a fair value of $35.57 per share. The RSUs vest on the third anniversary of the
grant date. If an executive terminates employment because of retirement, involuntary layoff, disability,
or death, the employee (or beneficiary) will immediately vest on a proration of stock units based on
active employment during the three-year performance period. In all other cases, the RSUs will not vest
and all rights to the stock units will terminate completely.
In addition to RSUs awarded under our long-term incentive program, we grant restricted stock to
employees for various achievements, referred to as other stock award units. The fair values of all stock
units are estimated using the average stock price on the date of grant. Stock units settle in common
stock on a one-for-one basis and are not contingent upon stock price.
Stock unit activity for the year ended December 31, 2009 is as follows:
(Units in thousands)
Incentive Program
Restricted Stock Units
Other Stock Award
Units
Number of units:
Outstanding at beginning of year 239 1,601
Granted 2,344 329
Dividends 61 57
Forfeited (124) (22)
Distributed (134) (391)
Outstanding at end of year 2,386 1,574
Unrecognized compensation cost at December 31, 2009 $ 66 $ 40
Weighted average remaining contractual life (years) 2.1 3.0
ShareValue Trust
The ShareValue Trust, established effective July 1, 1996, is a 14-year irrevocable trust that holds our
common stock, receives dividends, and distributes to employees the appreciation in value above a
3% per annum threshold rate of return at the end of each period. The total compensation expense to
be recognized over the life of the trust was determined using a binomial option-pricing model.
The ShareValue Trust is accounted for as a contra-equity account and stated at market value. Market
value adjustments are offset to Additional paid-in capital. At December 31, 2009, there was $36 of total
unrecognized compensation cost related to the ShareValue Trust which is expected to be recognized
during the six months ending June 30, 2010.
The Trust was split between two funds, “fund 1” and “fund 2”, upon its initial funding. Based on the
average stock price of $66.15 as of June 30, 2008, the market value of fund 2 exceeded the threshold
of $1,028 by $236. This excess was paid in Boeing common stock, except for partial shares and
distributions to non-U.S. employees and beneficiaries of deceased participants, which was paid in
cash.
At December 31, 2009 the Trust held 29,563,324 shares, of which 13,216,726 shares were included in
fund 1. If on June 30, 2010, the market value of fund 1 exceeds the appreciation threshold stock price,
the amount in excess of the threshold will be distributed to employees in shares of common stock. At
December 31, 2009 the threshold price was $85.46 per share. The Trust will terminate in 2010, and
any undistributed shares will be transferred to us upon termination.
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