Motorola 2011 Annual Report Download - page 99

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93
As of December 31, 2011, the weighted average contractual life for options outstanding and exercisable was six
and four years, respectively.
Stock Option Exchange
On May 14, 2009, the Company initiated a tender offer for certain eligible employees (excluding executive
officers and directors) to exchange certain out-of-the-money options for new options with an exercise price equal to
the fair market value of the Company’s stock as of the grant date. In order to be eligible for the exchange, the
options had to have been granted prior to June 1, 2007, expire after December 31, 2009 and have an exercise price
equal to or greater than $84.00. The offering period closed on June 12, 2009. On that date, 14 million options were
tendered and exchanged for 6 million new options with an exercise price of $47.11 and a ratable annual vesting
period over two years. The exchange program was designed so that the fair market value of the new options would
approximate the fair market value of the options exchanged. The resulting incremental compensation expense was
not material to the Company’s consolidated financial statements.
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. Shares of RS and RSUs assumed or replaced with comparable shares of RS or RSUs in conjunction with a
change in control will only have the restrictions lapse if the holder is also involuntarily terminated (for a reason
other than cause) or quits for good reason within 24 months of a change in control.
Restricted stock and restricted stock unit activity was as follows (in thousands, except fair value and employee
data):
2011 2010 2009
Years Ended December 31 RS and
RSU
Wtd. Avg.
Grant
Date Fair
Value RSU
Wtd Avg.
Grant
Date Fair
Value RS and RSU
Wtd Avg.
Grant
Date Fair
Value
RS and RSU outstanding at January 1 9,559 $51 8,061 $55 4,604 $76
Granted 5,150 44 4,772 49 5,478 43
Adjustments to RSUs outstanding to reflect
Mobility spin-off 3,638 20
Vested (3,230) 31 (2,407) 58 (988) 80
Terminated, canceled or expired (6,127) 44 (867) 56 (1,033) 60
RS and RSU outstanding at December 31 8,990 40 9,559 51 8,061 55
Approx. number of employees granted RSUs 12,351 29,973 26,969
At December 31, 2011, the Company had unrecognized compensation expense related to RSUs of $211 million,
net of estimated forfeitures, expected to be recognized over the weighted average period of approximately two years.
The total fair value of RS and RSUs vested during the years ended December 31, 2011, 2010 and 2009 was
$146 million, $114 million and $44 million, respectively. The aggregate fair value of outstanding RSUs as of
December 31, 2011 was $416 million. Pursuant to the completion of the Separation on January 4, 2011,
approximately 3.8 million unvested restricted stock units held by the employees of Motorola Mobility were
cancelled. Upon the completed divestiture of the Networks business on April 29, 2011, approximately 1.4 million
unvested restricted stock units were cancelled.