Honeywell 2002 Annual Report Download - page 263

The following table sets forth fair value per share information, including
related assumptions, used to determine compensation cost (see Note 1) consistent
with the requirements of SFAS No. 123.
2002 2001 2000
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Weighted average fair value per share of options
granted during the year(1) ...................... $12.64 $13.71 $18.21
Assumptions:
Historical dividend yield ....................... 1.9% 1.5% 1.4%
Historical volatility ........................... 43.8% 40.9% 27.8%
Risk-free rate of return ........................ 4.2% 5.2% 6.4%
Expected life (years) ........................... 5.0 5.0 5.0
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(1) Estimated on date of grant using Black-Scholes option-pricing model.
Restricted Stock Units
Restricted stock unit (RSU) awards entitle the holder to receive one share of
common stock for each unit when the units vest. RSU's are issued to certain key
employees as compensation and as incentives tied directly to the achievement of
certain performance objectives.
RSU's issued were 1,777,700, 186,500 and 1,374,640 in 2002, 2001 and 2000,
respectively. There were 2,342,960, 1,580,091 and 2,449,749 RSU's outstanding,
with a weighted average grant date fair value per share of $37.12, $43.49 and
$47.33 at December 31, 2002, 2001 and 2000, respectively.
Non-Employee Directors' Plan
We also have a Stock Plan for Non-Employee Directors (Directors' Plan) under
which restricted shares and options are granted. Each new director receives a
one-time grant of 3,000 shares of common stock, subject to specific
restrictions.
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