Honeywell 2007 Annual Report Download - page 114

HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)
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 at fair market value
at the date of grant as compensation. RSUs typically become fully vested over periods ranging from three to
seven years and are payable in Honeywell common stock upon vesting.
The following table summarizes information about RSU activity for the three years ended December 31,
2007:
Number of
Restricted
Stock Units
Weighted
Average
Grant Date
Fair Value
Per
Share
Non-vested at December 31, 2004 3,691,556 $ 31.20
Granted 1,163,984 $ 37.39
Vested (424,175) $ 32.84
Forfeited (465,834) $ 30.11
Non-vested at December 31, 2005 3,965,531 $ 32.97
Granted 1,948,650 $ 39.11
Vested (759,015) $ 30.04
Forfeited (403,167) $ 34.25
Non-vested at December 31, 2006 4,751,999 $ 35.85
Granted 1,980,850 $ 54.47
Vested (372,105) $ 32.48
Forfeited (503,747) $ 37.93
Non-vested at December 31, 2007 5,856,997 $ 42.18
As of December 31, 2007, there was approximately $153 million of total unrecognized compensation cost
related to non-vested RSUs granted under our stock plans which is expected to be recognized over a weighted-
average period of 2.06 years. Compensation expense related to RSUs was $47, $29 and $24 million in 2007,
2006 and 2005, respectively.
Non-Employee Directors' Plan—Under the Directors' Plan each new director receives a one-time grant of
3,000 shares of common stock, subject to specific restrictions.
The Directors' Plan also provides for an annual grant to each director of options to purchase 5,000 shares of
common stock at the fair market value on the date of grant. Options have generally become exercisable over a
three-year period and expire after ten years. Starting with 2007 option grants, the vesting period was extended to
four years.
Note 21—Commitments and Contingencies
Environmental Matters
We are subject to various federal, state, local and foreign government requirements relating to the protection
of the environment. We believe that, as a general matter, our policies, practices and procedures are properly
designed to prevent unreasonable risk of environmental damage and personal injury and that our handling,
manufacture, use and disposal of hazardous or toxic substances are in accordance with environmental and
safety laws and regulations. However, mainly because of past operations and operations of predecessor
companies, we, like other companies engaged in similar businesses, have incurred remedial response and
voluntary cleanup costs for site contamination and are a party to lawsuits and claims associated with
environmental and safety matters, including past production of products containing toxic substances. Additional
lawsuits, claims and costs involving environmental matters are likely to continue to arise in the future.
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