Halliburton 2011 Annual Report Download - page 123

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108
The fair value of options at the date of grant was estimated using the Black-Scholes option pricing
model. The expected volatility of options granted was a blended rate based upon implied volatility
calculated on actively traded options on our common stock and upon the historical volatility of our
common stock. The expected term of options granted was based upon historical observation of actual time
elapsed between date of grant and exercise of options for all employees. The assumptions and resulting fair
values of options granted were as follows:
Year Ended December 31
2011 2010 2009
Expected term (in years) 5.20 5.27 5.18
Expected volatility 40% 40% 53%
Expected dividend yield 0.69 – 1.01% 0.99 – 1.71% 1.23 – 2.55%
Risk-free interest rate 0.93 – 2.29% 1.20 – 2.78% 1.38 – 2.47%
Weighted average grant-date fair value per share $ 15.61 $ 9.94 $ 9.36
Restricted stock
Restricted shares issued under the Stock Plan are restricted as to sale or disposition. These
restrictions lapse periodically over an extended period of time not exceeding 10 years. Restrictions may
also lapse for early retirement and other conditions in accordance with our established policies. Upon
termination of employment, shares on which restrictions have not lapsed must be returned to us, resulting
in restricted stock forfeitures. The fair market value of the stock on the date of grant is amortized and
charged to income on a straight-line basis over the requisite service period for the entire award.
Our Restricted Stock Plan for Non-Employee Directors (Directors Plan) allows for each non-
employee director to receive an annual award of 800 restricted shares of common stock as a part of their
compensation. These awards have a minimum restriction period of six months, and the restrictions lapse
upon the earlier of mandatory director retirement at age 72 or early retirement from the Board after four
years of service. The fair market value of the stock on the date of grant is amortized over the lesser of the
time from the grant date to age 72 or the time from the grant date to completion of four years of service on
the Board. We reserved 200,000 shares of common stock for issuance to non-employee directors, which
may be authorized but unissued common shares or treasury shares. At December 31, 2011, 145,600 shares
had been issued to non-employee directors under this plan. There were 7,200 shares, 8,000 shares, and
8,000 shares of restricted stock awarded under the Directors Plan in 2011, 2010, and 2009. In addition,
during 2011, our non-employee directors were awarded 19,395 shares of restricted stock under the Stock
Plan, which are included in the table below.
The following table represents our Stock Plan and Directors Plan restricted stock awards and
restricted stock units granted, vested, and forfeited during 2011.
Weighted Average
Number of Shares Grant-Date Fair
Restricted Stock (in millions) Value per Share
Nonvested shares at January 1, 2011 13.3 $ 28.10
Granted 5.4 43.35
Vested (3.7) 28.81
Forfeited (0.8) 32.59
Nonvested shares at December 31, 2011 14.2 $ 33.45