Ford 2009 Annual Report Download - page 140

Notes to the Financial Statements
138 Ford Motor Company | 2009 Annual Report
NOTE 21. SHARE-BASED COMPENSATION (Continued)
Outstanding RSU-stock are either strictly time-based or a combination of performance and time-based awards.
Expenses associated with RSU-stock are recorded in Selling, administrative, and other expense.
• Time-based RSU-stock issued in 2006 and prior vest at the end of the restriction period and the expense is taken equally
over the restriction period.
• Time-based RSU-stock issued in and after 2007 generally have a graded vesting feature whereby one-third of each
RSU-stock vests after the first anniversary of the grant date, one-third after the second anniversary, and one-third after
the third anniversary. The expense is recognized using the graded vesting method.
• Performance RSU-stock have a performance period (usually 1-3 years) and a restriction period (usually 1-3 years).
Compensation expense for performance RSU-stock is not recognized until it is probable and estimable. Expense is then
recognized over the performance and restriction periods based on the fair market value of Ford Common Stock at grant
date.
We also grant stock options to our employees. We measure the fair value of the majority of our stock options using the
Black-Scholes option-pricing model, using historical volatility and our determination of the expected term. The expected
term of stock options is the time period that the stock options are expected to be outstanding. Historical data are used to
estimate option exercise behaviors and employee termination experience. Based on our assessment of employee
groupings and observable behaviors, we determined that a single grouping is appropriate. Generally, 33% of the stock
options are exercisable after the first anniversary of the date of grant, 66% after the second anniversary, and 100% after
the third anniversary. Stock options expire ten years from the grant date and are expensed in Selling, administrative, and
other expenses using a three-year graded vesting methodology.
Upon stock-settled compensation exercises and awards, we issued new shares of Common Stock. We do not expect
to repurchase a significant number of shares for treasury stock during 2010.
Restricted Stock Units
RSU-stock activity during 2009 was as follows:


6KDUHV
6KDUHV6KDUHV
6KDUHV
PLOOLRQV
PLOOLRQVPLOOLRQV
PLOOLRQV

:HLJKWHG
:HLJKWHG:HLJKWHG
:HLJKWHG

$YHUDJH*UDQW
$YHUDJH*UDQW$YHUDJH*UDQW
$YHUDJH*UDQW

'DW
'DW'DW
'DWH)DLU9DOXH
H)DLU9DOXHH)DLU9DOXH
H)DLU9DOXH

$JJUHJDWH
$JJUHJDWH$JJUHJDWH
$JJUHJDWH
,QWULQVLF9DOXH
,QWULQVLF9DOXH,QWULQVLF9DOXH
,QWULQVLF9DOXH
PLOOLRQV
PLOOLRQVPLOOLRQV
PLOOLRQV

2XWVWDQGLQJEHJLQQLQJRI\HDU 

    
*UDQWHG

    
9HVWHG 

    
)RUIHLWHG

    
2XWVWDQGLQJHQGRI\HDU

     

568VWRFNH[SHFWHGWRYHVW

  1$  
Intrinsic value of RSU-stock is measured by applying the closing stock price as of December 31 to the applicable
number of units. The fair value and intrinsic value of RSU-stock during 2009, 2008, and 2007 were as follows (in millions,
except RSU per unit amounts):







 


)DLUYDOXH
)DLUYDOXH)DLUYDOXH
)DLUYDOXH

*UDQWHG

     
:HLJKWHGDYHUDJHIRUPXOWLSOHJUDQWGDWHVSHUXQLW

     
9HVWHG 

     
,QWULQVLFYDOXH
,QWULQVLFYDOXH,QWULQVLFYDOXH
,QWULQVLFYDOXH

9HVWHG 

     
Compensation cost for RSU-stock was as follows (in millions):







 


&RPSHQVDWLRQFRVWQHWRIWD[HV

     
BBBBBBBBBB
1RWD[HVUHFRUGHGLQHDFKSHULRGGXHWRHVWDEOLVKHGYDOXDWLRQDOORZDQFHV