Honeywell 2012 Annual Report Download - page 102

At December 31, 2012 there was $123 million of total unrecognized compensation cost related to
non-vested stock option awards which is expected to be recognized over a weighted-average period of
2.38 years. The total fair value of options vested during 2012, 2011 and 2010 was $63, $52 and $41
million, respectively.
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. RSUs 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, 2012:
Number of
Restricted
Stock Units
Weighted
Average
Grant Date
Fair Value
Per Share
Non-vested at December 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,262,777 $40.49
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,842,367 42.33
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,593,979) 48.71
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (537,212) 40.45
Non-vested at December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,973,953 39.89
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,887,733 55.11
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,509,528) 49.48
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (605,725) 40.11
Non-vested at December 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,746,433 41.35
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,156,753 59.52
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,380,251) 31.84
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (427,196) 45.78
Non-vested at December 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,095,739 $49.91
As of December 31, 2012, there was approximately $185 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 2.0 years. Compensation expense related to RSUs
was $105, $109 and $109 million in 2012, 2011, and 2010, respectively.
Non-Employee Directors’ Plan—Under the Directors’ Plan each new non-employee director
receives a one-time grant of 3,000 restricted stock units that will vest on the fifth anniversary of
continuous Board service.
In 2011, each non-employee director received an annual grant to purchase 5,000 shares of
common stock at the fair market value on the date of grant. In 2012, the annual equity grant changed
from a fixed number of shares to a target value of $75,000 and consists of 50 percent options and 50
percent RSUs. Options become exercisable over a four-year period and expire after ten years. RSUs
generally vest on the third anniversary of the date of grant.
Note 21—Redeemable Noncontrolling Interest
As discussed in Note 2 Acquisitions and Divestitures, on October 22, 2012, the Company acquired
a 70 percent controlling interest in Thomas Russell Co. During the calendar year 2016, Honeywell has
the right to acquire and the noncontrolling shareholder has the right to sell to Honeywell the remaining
30 percent interest at a price based on a multiple of Thomas Russell Co.’s average annual operating
income from 2013 to 2015, subject to a predetermined cap and floor. Additionally, Honeywell has the
right to acquire the remaining 30 percent interest for a fixed price equivalent to the cap at any time on
93
HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)