Raytheon 2014 Annual Report Download - page 110

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
101
The weighted-average shares outstanding for basic and diluted EPS were as follows:
(In millions) 2014 2013 2012
Shares for basic EPS (including 5.5 participating securities for 2014, 6.4 for
2013, and 6.3 for 2012) 312.0 323.4 333.2
Dilutive effect of stock options and LTPP 0.6 0.8 1.0
Shares for diluted EPS 312.6 324.2 334.2
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 2014, 2013 and 2012. 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) 2014 2013 2012
Stock options included in the calculation of EPS (dilutive)(2) —0.1 0.9
(2) Stock options included in the calculation of EPS (dilutive) were less than 1 million for 2014.
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 them. There were no shares of preferred stock outstanding at December 31, 2014 and
December 31, 2013.
Note 12: Stock-based Compensation Plans
Stock-based compensation expense and the associated tax benefits were as follows:
(In millions) 2014 2013 2012
Stock-based compensation expense $ 148 $ 129 $ 122
Stock-based tax benefit 48 39 37
At December 31, 2014, there was $161 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, 2014, 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 7.0 million shares
available for awards under such plans as of December 31, 2014.
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 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 generally over the vesting period with a
corresponding credit to additional paid-in capital.
During 2014, we awarded 0.3 million restricted stock units (RSUs) to retirement-eligible employees. These awards vest over
a specified period of time as determined by the Management Development and Compensation Committee of our Board of
Directors (MDCC) and are compensatory in nature. The RSUs continue to vest, but do not accelerate, on the scheduled vesting
dates into retirement subject to the employee's compliance with certain post-employment covenants. Due to the continued
vesting provisions of the RSUs into retirement, the Company recognized all of the stock compensation expense associated