ADT 2007 Annual Report Download - page 251

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
19. Share Plans (Continued)
Weighted-Average
Grant-Date Fair
Non-vested Performance Shares Shares Value
Non-vested at September 29, 2006 ............................... 463,180 $44.51
Granted ................................................. 625,913 59.49
Vested ................................................... (28,130) 44.37
Distributed at Separation ..................................... (226,834) 44.84
Conversion of performance share awards to restricted awards ........... (279,378) 44.26
Forfeited ................................................. (23,441) 50.20
Non-vested at September 28, 2007 ............................... 531,310 53.36
The total fair value of performance shares vested during 2007 was $1 million while 2006 and 2005
was insignificant.
As of September 28, 2007, there was $144 million of total unrecognized compensation cost related
to both non-vested restricted share awards and performance shares. That cost is expected to be
recognized over a weighted-average period of 3.1 fiscal years.
Deferred Stock Units—Deferred Stock Units (‘‘DSUs’’) are notional units that are tied to the value
of Tyco common shares with distribution deferred until termination of employment. Distribution, when
made, will be in the form of actual shares. Similar to restricted share grants that vest through the
passage of time, the fair value of DSUs is determined based on the market value of the Company’s
shares on the grant date and is amortized to expense over the vesting period. Recipients of DSUs do
not have the right to vote such shares and do not have the right to receive cash dividends. However,
they have the right to receive dividend equivalents. Conditions of vesting are determined at the time of
grant. Under the 2004 Plan, the majority of Tyco’s DSU grants vest in equal annual installments over
three years. The Company has granted 1 million DSUs, all of which were outstanding at September 28,
2007.
A summary of the status of the Company’s DSUs as of September 28, 2007 and changes during
the year then ended is presented below and has been adjusted for the Separation and the one for four
reverse stock split:
Weighted-Average
Grant-Date Fair
Non-vested Deferred Stock Units Shares Value
Non-vested at September 29, 2006 ........................ 125,894 $13.45
Granted ........................................... 27,138 42.29
Dividend reinvestment ................................ 13,777 50.67
Vested ............................................ (166,809) 48.12
Non-vested at September 28, 2007 ........................ — —
The weighted-average grant-date fair value of DSUs granted during 2007, 2006 and 2005 was
$42.29, $44.95 and $49.38, respectively. The total fair value of DSUs vested during 2007, 2006 and 2005
was $8 million, $4 million and $6 million, respectively. As of September 28, 2007, all DSUs are vested.
2007 Financials 159