HP 2008 Annual Report Download - page 106

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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 2: Stock-Based Compensation (Continued)
The details of restricted stock awards granted and assumed through acquisitions were as follows:
2008 2007 2006
Weighted- Weighted- Weighted-
Average Grant Average Grant Average Grant
Date Fair Date Fair Date Fair
Shares Value Shares Value Shares Value
In thousands In thousands In thousands
Granted and assumed
through acquisitions:
Restricted stock ....... 1,393 $46 1,469 $43 1,492 $32
Restricted stock units . . 11,319 $45 151 $45 33 $30
12,712 $45 1,620 $44 1,525 $32
In fiscal 2008, approximately 11 million restricted stock units with a weighted-average grant date
fair value of $45 were assumed through the acquisition of EDS.
The details of non-vested restricted stock awards at fiscal year end were as follows:
2007
2008 Shares 2006
In thousands
Nonvested at October 31:
Restricted stock ............................................ 2,835 4,763 5,492
Restricted stock units ........................................ 10,095 935 873
12,930 5,698 6,365
As of October 31, 2008, there was $263 million of unrecognized stock-based compensation expense
related to nonvested restricted stock awards. That cost is expected to be recognized over a weighted-
average period of 1.2 years. As of October 31, 2007, there was $83 million of unrecognized stock-based
compensation expense related to nonvested restricted stock awards. That cost is expected to be
recognized over a weighted-average period of 1.0 years.
Performance-based Restricted Units
HP estimated the fair value of a target PRU share using the Monte Carlo simulation model, as the
TSR modifier contains a market condition. The estimated fair value of each target share for the
current year was $40.21. The estimated fair value of a target share for the second and third years of the
three-year performance period will be determined when the cash flow performance goal is set for each
of the next two annual performance periods and the expense will be amortized over the remainder of
the three-year performance period. The estimated expense, net of forfeitures, is based on the Monte
Carlo fair value and is updated for the achievement of the cash flow performance goal for that year at
the end of each reporting period.
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