Motorola 2008 Annual Report Download - page 123

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The weighted average contractual life for options outstanding and exercisable as of December 31, 2008 was
six and five years, respectively.
Restricted Stock and Restricted Stock Units
Restricted stock (“RS”) and restricted stock unit (“RSU”) grants consist of shares or the rights to shares of the
Company’s common stock which are awarded to employees and non-employee directors. The grants are restricted
such that they are subject to substantial risk of forfeiture and to restrictions on their sale or other transfer by the
employee. For shares of RS and RSUs issued under plans prior to the 2006 Omnibus Plan, upon the occurrence of
a change in control, the restrictions on all shares of RS and RSUs outstanding on the date on which the change in
control occurs will lapse. Under the 2006 Omnibus Plan, the shares of RS or RSUs only become exercisable if the
holder is also involuntarily terminated within 24 months of the change in control.
Restricted stock and restricted stock unit activity was as follows (in thousands, except fair value and employee
data):
Years Ended December 31 RS and RSU
Wtd. Avg.
Grant Date
Fair Value RS and RSU
Wtd Avg.
Grant Date
Fair Value RS and RSU
Wtd Avg.
Grant Date
Fair Value
2008 2007 2006
RS and RSU outstanding at
January 1 10,755 $17 6,016 $19 4,383 $16
Granted 27,102 9 7,766 18 2,761 22
Vested (2,308) 17 (1,068) 19 (938) 15
Terminated, canceled or
expired (3,319) 13 (1,959) 19 (190) 18
RSU outstanding at
December 31 32,230 11 10,755 17 6,016 19
Approx. number of
employees granted RSUs 28,981 1,801 252
At December 31, 2008, the Company had unrecognized compensation expense related to restricted stock units
of $213 million, net of estimated forfeitures, expected to be recognized over the weighted average period of
approximately three years. An aggregate of approximately 27.1 million, 7.8 million and 2.8 million shares of
restricted stock units were granted in 2008, 2007 and 2006, respectively. The total fair value of restricted stock
and restricted stock unit shares vested during the years ended December 31, 2008, 2007 and 2006 was
$19 million, $13 million and $22 million, respectively. The aggregate intrinsic value of outstanding restricted stock
units as of December 31, 2008 was $143 million. The significant increase in the number of employees that were
granted RSUs in 2008 is due to the broad based equity grant being issued in RSUs in lieu of stock options.
Total Share-Based Compensation Expense
Compensation expense for the Company’s employee stock options, stock appreciation rights, employee stock
purchase plans, restricted stock and restricted stock units was as follows:
Year Ended December 31 2008 2007 2006
Share-based compensation expense included in:
Costs of sales $32 $33 $30
Selling, general and administrative expenses 155 188 162
Research and development expenditures 93 94 84
Share-based compensation expense included in Operating earnings (loss) 280 315 276
Tax benefit 86 99 85
Share-based compensation expense, net of tax $ 194 $ 216 $ 191
Decrease in Basic earnings per share $(0.09) $(0.09) $(0.08)
Decrease in Diluted earnings per share $(0.09) $(0.09) $(0.08)
115