Raytheon 2011 Annual Report Download - page 109

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
101
There were no stock options with exercise prices greater than the average market price (anti-dilutive) that were excluded from
our calculation of diluted EPS in 2011, 2010 and 2009. Stock options to purchase the following number of shares of common
stock had exercise prices that were less than the average market price (dilutive) of our common stock and were included in
our calculations of diluted EPS:
(In millions)
Stock options included in the calculation of EPS (dilutive)
2011
4.4
2010
6.5
2009
8.7
Our Board of Directors is authorized to issue up to 200 million shares of preferred stock, $0.01 par value per share, in multiple
series with terms as determined by our Board of Directors. There were no shares of preferred stock outstanding at December 31,
2011 and December 31, 2010.
Warrants to purchase shares of our common stock with an exercise price of $37.50 per share, were included in our calculations
of diluted EPS at December 31, 2011, 2010 and 2009. These warrants expired in June 2011.
Note 13: Stock-based Compensation Plans
We recorded $102 million, $128 million and $127 million of expense related to stock-based compensation in 2011, 2010 and
2009, respectively. We recorded $34 million, $43 million and $42 million as a tax benefit related to stock-based compensation
in 2011, 2010 and 2009, respectively.
At December 31, 2011, we had stock-based compensation awards outstanding under a number of stock plans, including our
2010 Stock Plan. Future grants of awards will be made from the 2010 Stock Plan and not from our prior plans.
Shares issued as a result of stock awards, stock option exercises or conversion of restricted stock unit awards will be funded
through the issuance of new shares. Of the 41.8 million shares authorized under our stock plans, there were 10.8 million shares
available for awards under such plans as of December 31, 2011.
Restricted Stock
The 2010 Stock Plan provides for the award of restricted stock awards, restricted stock units and stock appreciation rights to
our employees, officers, nonemployee directors and consultants. Awards of restricted stock, restricted stock units and stock
appreciation rights generally are made by the Management Development and Compensation Committee of our Board of
Directors (MDCC) and are compensatory in nature. These awards vest over a specified period of time as determined by the
MDCC, generally four years for employee awards and one year for nonemployee directors. Restricted stock awards entitle
the recipient to full dividend and voting rights beginning on the date of grant. Non-vested shares are restricted as to disposition
and subject to forfeiture under certain circumstances. At the date of award each share of restricted stock is credited to common
stock at par value. The fair value of restricted stock, calculated under the intrinsic value method at the date of award, is charged
to income as compensation expense over the vesting period with a corresponding credit to additional paid-in capital.