HP 2012 Annual Report Download - page 106

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 2: Stock-Based Compensation (Continued)
Non-vested PRUs as of October 31, 2012 and 2011 and changes during fiscal 2012 and 2011 were
as follows:
2012 2011
Shares in thousands
Outstanding Target Shares at beginning of year ........................... 11,382 18,508
Granted ....................................................... 1,251 5,950
Vested ......................................................... — —
Change in units due to performance and market conditions achievement for PRUs
vested in the year(1) ............................................. (5,617) (10,862)
Forfeited ....................................................... (1,328) (2,214)
Outstanding Target Shares at end of year ............................... 5,688 11,382
Outstanding Target Shares of PRUs assigned a fair value at end of year ......... 3,492(2) 5,867(3)
(1) The minimum level of TSR was not met for PRUs granted in fiscal 2010 and 2009, which resulted
in the cancellation of approximately 5.6 million and 10.9 million Target Shares on October 31, 2012
and October 31, 2011, respectively.
(2) Excludes Target Shares for the third year for PRUs granted in fiscal 2011 and for the second and
third years for PRUs granted in fiscal 2012, as the measurement date has not yet been established.
The measurement date and related fair value for the excluded PRUs will be established when the
annual performance goals are approved.
(3) Excludes Target Shares for the third year for PRUs granted in fiscal 2010 and for the second and
third years for PRUs granted in fiscal 2011, as the measurement date has not yet been established.
At October 31, 2012, there was $17 million of unrecognized pre-tax stock-based compensation
expense related to PRUs with an assigned fair value, which HP expected to recognize over the
remaining weighted-average vesting period of 1.1 years. At October 31, 2011, there was $82 million of
unrecognized pre-tax stock-based compensation expense related to PRUs with an assigned fair value,
which HP expected to recognize over the remaining weighted-average vesting period of 1.4 years.
Employee Stock Purchase Plan
HP sponsors the Hewlett-Packard Company 2011 Employee Stock Purchase Plan (the ‘‘2011
ESPP’’), pursuant to which eligible employees may contribute up to 10% of base compensation, subject
to certain income limits, to purchase shares of HP’s common stock. Purchases made prior to fiscal year
2011 were made under the Hewlett-Packard Company 2000 Employee Stock Purchase Plan (the ‘‘2000
ESPP’’), which expired in November 2010.
For purchases made on or after October 31, 2011, employees purchased stock under the 2011
ESPP at a price equal to 95% of the fair market value on the purchase date. Because all the criteria of
a non-compensatory plan were met, no stock-based compensation expense was recorded in connection
with those purchases. From May 1, 2009 to October 31, 2010, no discount was offered for purchases
made under the 2000 ESPP.
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