Boeing 2009 Annual Report Download - page 109

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Performance Shares
Prior to 2006, Performance Shares were a significant component of our long-term incentive
compensation. Performance Shares are stock units that are convertible to common stock, on a
one-to-one basis, contingent upon stock price performance. If, at any time up to five years after award,
the stock price reaches and maintains for 20 consecutive days a price equal to stated price growth
targets, a stated percentage (up to 125%) of the Performance Shares awarded are vested and
convertible to common stock.
Performance Shares activity for the year ended December 31, 2009 is as follows:
(Shares in thousands) Shares
Number of Performance Shares:
Outstanding at beginning of year 747
Dividend 29
Forfeited (4)
Outstanding at end of year 772
Outstanding at end of year not contingent on future employment 439
The following table provides additional information regarding potentially convertible and converted or
deferred Performance Shares.
Grant
Date
Expiration
Date
Weighted Average
Grant Date Fair Value
Cumulative
Vested at
December 31,
Shares
Convertible at
December 31,
(Shares in thousands) 2009 2009 2008
2/28/2005 2/28/2010 $33.05 90% 772 747
Performance Shares granted in 2005 were measured on the date of grant using a Monte Carlo model.
For years ended December 31, 2009, 2008 and 2007, we recorded $0, $0 and $54, respectively, to
accelerate the amortization of compensation cost for those Performance Shares converted to common
stock or deferred as stock or cash at the employees’ election.
Additionally, certain Performance Shares that have a cash settlement, are re-measured each balance
sheet date using a Monte Carlo model and are recalculated as a liability. Liability awards vesting and
transferred into deferred compensation plans totaled $0, $0 and $48 for the years ended December 31,
2009, 2008 and 2007, respectively.
Other Compensation Arrangements
Performance Awards
Performance Awards are cash units that payout based on the achievement of long-term financial goals
at the end of a three-year period. Each unit has an initial value of $100 dollars. The amount payable at
the end of the three-year performance period may be anywhere from $0 to $200 dollars per unit,
depending on the Company’s performance against plan for a three-year period. The Compensation
Committee has the discretion to pay these awards in cash, stock, or a combination of both after the
three-year performance period. Compensation expense, based on the estimated performance payout,
is recognized ratably over the performance period.
During 2009, 2008 and 2007, we granted Performance Awards to our executives with the payout
based on the achievement of financial goals for the three-year periods ending December 31, 2011,
2010 and 2009, respectively. The minimum payout amount is $0 and the maximum amount we could
be required to pay out for the 2009, 2008 and 2007 Performance Awards is $304, $289 and $47.
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