DuPont 2009 Annual Report Download - page 102

E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)
Non-vested awards of RSUs and PSUs as of December 31, 2009 and 2008 are shown below. The weighted-average
grant-date fair value of RSUs and PSUs granted during 2009, 2008, and 2007 was $23.72, $45.70, and $51.00,
respectively. The table also includes Board of Directors’ cash-settled RSUs granted prior to 2008.
Weighted
Average
Number Grant Date
of Shares Fair Value
(in thousands) (per share)
Nonvested, December 31, 2008 4,009 $45.72
Granted 2,507 $23.72
Vested (1,678) $44.15
Forfeited (336) $40.12
Nonvested, December 31, 2009 4,502 $34.56
As of December 31, 2009, there was $33 unrecognized stock-based compensation expense related to nonvested
awards. That cost is expected to be recognized over a weighted-average period of 1.52 years. The total fair value of
stock units vested during 2009, 2008 and 2007 was $74, $60 and $53, respectively.
Other Cash-based Awards
Cash awards under the EIP plan may be granted to employees who have contributed most to the company’s success,
with consideration being given to the ability to succeed to more important managerial responsibility. Such awards were
$141, $140 and $163 for 2009, 2008 and 2007, respectively. The amounts of the awards are dependent on company
earnings and are subject to maximum limits as defined under the governing plans.
In addition, the company has other variable compensation plans under which cash awards may be granted. These
plans include Pioneer’s Annual Reward Program and the company’s regional and local variable compensation plans.
Such awards were $213, $196 and $217 for 2009, 2008 and 2007, respectively.
24. DERIVATIVES AND OTHER HEDGING INSTRUMENTS
Effective January 1, 2009, the company prospectively implemented the revised requirements for enhancing the
disclosures of derivative and hedging instruments to provide users of financial statements with a better understanding
of the objectives of a company’s derivative use and the risks managed.
Objectives and Strategies for Holding Derivative Instruments
In the ordinary course of business, the company enters into contractual arrangements (derivatives) to reduce its
exposure to foreign currency, interest rate and commodity price risks under established procedures and controls. The
company has established a variety of approved derivative instruments to be utilized in each financial risk management
program, as well as varying levels of exposure coverage and time horizons based on an assessment of risk factors
related to each hedging program. Derivative instruments utilized during the period include forwards, options, futures
and swaps. The company has not designated any nonderivatives as hedging instruments.
The company established a financial risk management framework that incorporated the Corporate Financial Risk
Management Committee and established financial risk management policies and guidelines that authorize the use of
specific derivative instruments and further establishes procedures for control and valuation, counterparty credit
approval and routine monitoring and reporting. The counterparties to these contractual arrangements are major
financial institutions and major commodity exchanges. The company is exposed to credit loss in the event of
nonperformance by these counterparties. The company manages this exposure to credit loss through the
aforementioned credit approvals, limits and monitoring procedures and, to the extent possible, by restricting the period
over which unpaid balances are allowed to accumulate. The company anticipates performance by counterparties to
F-44