Raytheon 2013 Annual Report Download - page 108

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
98
Note 12: Stock-based Compensation Plans
Stock-based compensation expense and the associated tax benefits were as follows:
(In millions) 2013 2012 2011
Stock-based compensation expense $ 129 $ 122 $ 102
Stock-based tax benefit 39 37 34
At December 31, 2013, there was $183 million of compensation expense related to nonvested awards not yet recognized
which is expected to be recognized over a weighted-average period of 1.6 years.
At December 31, 2013, 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 7.3 million shares
available for awards under such plans as of December 31, 2013.
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.
Restricted stock activity was as follows:
Shares
(in thousands)
Weighted-
Average
Grant Date
Fair Value
Outstanding at December 31, 2010 5,443 $ 51.30
Granted 2,089 49.63
Vested (1,701) 52.25
Forfeited (292) 51.25
Outstanding at December 31, 2011 5,539 50.38
Granted 2,370 50.38
Vested (1,733) 51.78
Forfeited (338) 50.07
Outstanding at December 31, 2012 5,838 49.98
Granted 1,855 67.46
Vested (1,708) 48.93
Forfeited (648) 52.39
Outstanding at December 31, 2013 5,337 $ 56.10
Long-Term Performance Plan (LTPP)
In 2004, we established the LTPP, which provides for restricted stock unit awards granted from our stock plans to our senior
leadership. These awards vest at the end of a three-year performance cycle based upon the achievement of specific pre-
established levels of performance.