ADT 2007 Annual Report Download - page 250

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
19. Share Plans (Continued)
Restricted Share Awards—Restricted share awards are granted subject to certain restrictions.
Conditions of vesting are determined at the time of grant under the 2004 Plan. All restrictions on the
award will lapse upon normal retirement, death or disability of the employee.
For grants which vest based on certain specified performance criteria, the fair market value of the
shares or units is expensed over the period of performance, once achievement of criteria is deemed
probable. For grants that vest through passage of time, the fair market value of the award at the time
of the grant is amortized to expense over the period of vesting. The fair value of restricted share
awards is determined based on the market value of the Company’s shares on the grant date. Restricted
share awards generally vest after a period of three or four years, as determined by the Compensation
Committee, upon attainment of various levels of performance that equal or exceed targeted levels, if
applicable. The compensation expense recognized for restricted share awards is net of estimated
forfeitures.
Recipients of restricted shares have the right to vote such shares and receive dividends, whereas
recipients of restricted units have no voting rights and receive dividend equivalents.
A summary of the status of the Company’s restricted share awards and performance shares as of
September 28, 2007 and changes during the year then ended is presented in the tables below and has
been adjusted for the conversion of Tyco restricted share awards and performance shares to restricted
share awards and performance shares of Covidien and Tyco Electronics, the Separation and the one for
four reverse stock split:
Weighted-Average
Grant-Date Fair
Non-vested Restricted Share Awards Shares Value
Non-vested at September 29, 2006 ............................. 2,645,475 $47.07
Granted ................................................ 5,148,791 49.49
Vested ................................................. (1,279,410) 45.69
Distributed at Separation .................................... (1,830,771) 47.67
Conversion of performance share awards to restricted awards .......... 279,378 44.26
Forfeited ................................................ (448,309) 48.13
Non-vested at September 28, 2007 ............................. 4,515,154 49.83
The weighted-average grant-date fair value of restricted share awards granted during 2007, 2006
and 2005 was $49.49, $45.37 and $55.87, respectively. The total fair value of restricted share awards
vested during 2007, 2006 and 2005 was $58 million, $26 million and $3 million, respectively.
158 2007 Financials