Halliburton 2013 Annual Report Download - page 82

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Our Stock and Incentive Plan, as amended (Stock Plan), provides for the grant of any or all of the following types of
stock-based awards:
- stock options, including incentive stock options and nonqualified stock options;
- restricted stock awards;
- restricted stock unit awards;
- stock appreciation rights; and
- stock value equivalent awards.
There are currently no stock appreciation rights, stock value equivalent awards, or incentive stock options outstanding.
Under the terms of the Stock Plan, approximately 172 million shares of common stock have been reserved for issuance
to employees and non-employee directors. At December 31, 2013, approximately 28 million shares were available for future
grants under the Stock Plan. The stock to be offered pursuant to the grant of an award under the Stock Plan may be authorized
but unissued common shares or treasury shares.
In addition to the provisions of the Stock Plan, we also have stock-based compensation provisions under our Restricted
Stock Plan for Non-Employee Directors and our Employee Stock Purchase Plan (ESPP).
Each of the active stock-based compensation arrangements is discussed below.
Stock options
The majority of our options are generally issued during the second quarter of the year. All stock options under the
Stock Plan are granted at the fair market value of our common stock at the grant date. Employee stock options vest ratably over
a three- or four-year period and generally expire 10 years from the grant date. Compensation expense for stock options is
generally recognized on a straight line basis over the entire vesting period. No further stock option grants are being made under
the stock plans of acquired companies.
The following table represents our stock options activity during 2013.
Number
of Shares
(in millions)
Weighted
Average
Exercise Price
per Share
Weighted
Average
Remaining
Contractual
Term (years)
Aggregate
Intrinsic Value
(in millions)
Outstanding at January 1, 2013
18.1
$
32.23
Granted
5.4
43.06
Exercised
(4.7
)
27.35
Forfeited/expired
(0.7
)
37.37
Outstanding at December 31, 2013
18.1
$
36.57
7.1
$
256
Exercisable at December 31, 2013
9.0
$
33.48
5.3
$
156
The total intrinsic value of options exercised was $93 million in 2013, $12 million in 2012, and $102 million in 2011.
As of December 31, 2013, there was $83 million of unrecognized compensation cost, net of estimated forfeitures, related to
nonvested stock options, which is expected to be recognized over a weighted average period of approximately two years.
Cash received from option exercises was $277 million during 2013, $107 million during 2012, and $160 million
during 2011.
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
2013
2012
2011
Expected term (in years)
5.27
5.21
5.20
Expected volatility
40%
46%
40%
Expected dividend yield
0.94 - 1.33%
0.99 – 1.24%
0.69 – 1.01%
Risk-free interest rate
0.77 - 1.73%
0.65 – 1.15%
0.93 – 2.29%
Weighted average grant-date fair value per share
$14.34
$11.99
$15.61