Kraft 2010 Annual Report Download - page 82

The total intrinsic value of options exercised was $92 million in 2010, $72 million in 2009, and $76 million in 2008. Cash received from options exercised
was $134 million in 2010, $79 million in 2009, and $80 million in 2008. The actual tax benefit realized for the tax deductions from the option exercises
totaled $60 million in 2010, $52 million in 2009, and $44 million in 2008.
Restricted and Deferred Stock:
We may grant shares of restricted or deferred stock to eligible employees, giving them in most instances all of the rights of shareholders, except that they may
not sell, assign, pledge or otherwise encumber the shares. Shares of restricted and deferred stock are subject to forfeiture if certain employment conditions are
not met. Restricted and deferred stock generally vest on the third anniversary of the grant date.
Shares granted in connection with our long-term incentive plan vest based on varying performance, market and service conditions. The unvested shares have
no voting rights and do not pay dividends.
The fair value of the restricted and deferred shares at the date of grant is amortized to earnings over the restriction period. We recorded compensation expense
related to restricted and deferred stock of $128 million in 2010, $133 million in 2009, and $160 million in 2008. The deferred tax benefit recorded related to
this compensation expense was $39 million in 2010, $44 million in 2009, and $53 million in 2008. The unamortized compensation expense related to our
restricted and deferred stock was $150 million at December 31, 2010 and is expected to be recognized over a weighted-average period of two years.
Our restricted and deferred stock activity for the year ended December 31, 2010 was:
Number of Shares
Weighted-Average
Grant Date Fair
Value Per Share
Balance at January 1, 2010 13,854,953 $ 29.30
Granted 5,782,531 28.82
Vested (4,063,589) 34.17
Forfeited (1,352,401) 27.91
Balance at December 31, 2010 14,221,494 27.84
In January 2010, we granted 1.7 million shares of stock in connection with our long-term incentive plan, and the market value per share was $27.33 on the
date of grant. During 2010, we granted an additional 0.6 million shares of stock in connection with our long-term incentive plan and market value per share
was $29.15 on the date of grant. In February 2010, as part of our annual equity program, we issued 2.5 million shares of restricted and deferred stock to
eligible employees, and the market value per restricted or deferred share was $29.15 on the date of grant. During 2010, we issued an additional 1.0 million
off-cycle shares of restricted and deferred stock at a weighted-average market value per restricted or deferred share of $29.57 on the date of grant, including
shares issued to Cadbury employees under our annual equity program. In aggregate, we issued 5.8 million restricted and deferred shares during 2010,
including those issued as part of our long-term incentive plan.
In January 2009, we granted 1.5 million shares of stock in connection with our long-term incentive plan, and the market value per share was $27.00 on the
date of grant. In February 2009, as part of our annual equity program, we issued 4.1 million shares of restricted and deferred stock to eligible employees, and
the market value per restricted or deferred share was $23.64 on the date of grant. We also issued 0.2 million off-cycle shares of restricted and deferred stock
during 2009, and the weighted-average market value per restricted or deferred share was $25.55 on the date of grant.
In January 2008, we granted 1.4 million shares of stock in connection with our long-term incentive plan, and the market value per share was $32.26 on the
date of grant. In February 2008, as part of our annual equity program, we issued 3.4 million shares of restricted and deferred stock to eligible employees, and
the market value per restricted or deferred share was $29.49 on the date of grant. We also issued 0.2 million off-cycle shares of restricted and deferred stock
during 2008, and the weighted-average market value per restricted or deferred share was $30.38 on the date of grant. The total number of restricted and
deferred shares issued in 2008 was 5.0 million.
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