Metro PCS 2010 Annual Report Download - page 132

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MetroPCS Communications, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2010, 2009 and 2008
F-26
Compensation expense is recognized over the requisite service period for the entire award, which is generally the
maximum vesting period of the award.
During the year ended December 31, 2010, 55,625 shares of common stock were tendered to the Company by an
employee to cover the income tax obligation allocation with a stock option exercise. These shares were accounted
for as treasury stock.
Restricted Stock Awards
Restricted stock awards are share awards that entitle the holder to receive shares of the Company’s common stock
which become fully tradable upon vesting. During the years ended December 31, 2010 and 2009, pursuant to the
2004 Plan, the Company issued 1,947,574 and 1,414,410, restricted stock awards, respectively. The restricted stock
awards granted generally vest on a four-year vesting schedule with 25% vesting on the first anniversary date of the
award and the remainder pro-rata on a monthly or quarterly basis thereafter. The Company determined the grant-
date fair value of the restricted stock awards granted during the years ended December 31, 2010 and 2009 to be
approximately $12.8 million and $20.1 million, respectively, based on the closing price of the Company’s common
stock on the New York Stock Exchange on the grant dates. The estimated compensation cost of the restricted stock
awards, which is equal to the fair value of the awards on the date of grant net of estimated forfeitures, is recognized
on a straight-line basis over the vesting period.
Vesting in the restricted stock awards triggers an income tax obligation for the employee that is required to be
remitted to the relevant tax authorities. To effect the tax withholding, the Company has agreed to repurchase a
sufficient number of common shares from the employee to cover the income tax obligation. The stock repurchase is
being accounted for as treasury stock. During the year ended December 31, 2010, the Company repurchased
182,193 shares of stock, respectively, from certain employees to settle the income tax obligation associated with
vesting in restricted stock awards.
The following table summarizes information about restricted stock award activity:
Restricted Stock Awards Shares
Weighted
Average
Grant-Date
Fair Value
Unvested balance, January 1, 2009 ........................................................................................... 0 $ 0
Grants ....................................................................................................................................... 1,414,410 $ 14.19
Vested shares ............................................................................................................................ 0 $ 0
Forfeitures ................................................................................................................................ (47,240) $ 14.23
Unvested balance, Decembe
r
31, 2009 ..................................................................................... 1,367,170 $ 14.19
Grants ....................................................................................................................................... 1,947,574 $ 6.57
Vested shares ............................................................................................................................ (589,903) $ 14.20
Forfeitures ................................................................................................................................ (59,731) $ 9.34
Unvested balance, Decembe
r
31, 2010 ..................................................................................... 2,665,110 $ 8.73
At December 31, 2010, there was $18.7 million of total unrecognized compensation cost related to unvested
restricted stock and that cost is expected to be recognized over a weighted-average period of 2.91 years. The total
fair value of unvested shares granted that was recognized as compensation expense related to restricted stock for the
year ended December 31, 2010 was $7.2 million.
13. Employee Benefit Plan:
The Company sponsors a savings plan under Section 401(k) of the Internal Revenue Code for the majority of its
employees. The plan allows employees to contribute a portion of their pretax income in accordance with specified
guidelines. The Company did not match employee contributions as of December 31, 2008. The Company made no
contributions to the savings plan through December 31, 2008. On January 1, 2009, the Company adopted a limited
matching contribution policy and began matching certain employee contributions to the savings plan as of that date.