Comfort Inn 2007 Annual Report Download - page 85

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CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
Restricted Stock
The following table is a summary of activity related to restricted stock grants to non-employee directors and key
employees for the year ended December 31:
2007
2006
2005
Restricted shares granted ............................................................................................. 157,467 143,943 265,589
Weighted average grant date fair value per share ........................................................ $ 40.28 $ 48.67 $ 31.97
Aggregate grant date fair value ($000) ........................................................................ $ 6,343 $ 7,005 $ 8,491
Restricted shares forfeited............................................................................................ 43,783 29,443 29,150
Vesting service period of shares granted ..................................................................... 3-4 years 3-4 years 3-5 years
Fair value of shares vested ($000) ............................................................................... $ 7,802 $ 10,959 $ 5,663
Compensation expense related to the fair value of these awards is recognized straight-line over the requisite service
period based on those restricted stock grants that ultimately vest. The fair value is measured by the average of the high
and low market price of the Company’ s common stock on the date of the grant. Restricted stock awards in 2007 and 2006
generally vest ratably at 25 percent per year beginning with the first anniversary of the grant date. Restricted stock awards
during 2005 generally vest ratably at 20 percent per year beginning with the first anniversary of the grant date.
Performance Vested Restricted Stock Units
The Company has granted performance vested restricted stock units (“PVRSU”) to certain officers. The vesting of
these stock awards is contingent upon the Company achieving specified earnings per share targets at the end of specified
performance periods and the employees’ continued employment. The performance conditions affect the number of shares
that will ultimately vest. The range of possible stock-based award vesting is between 50% and 200% of the initial target.
Under SFAS No. 123R, compensation expense related to these awards will be recognized over the requisite period
regardless of whether the performance targets have been met based on the Company’ s estimate of the achievement of the
performance target. The Company has currently estimated that 125% and 145% of the 2007 and 2006 award targets will
be achieved, respectively. The fair value is measured by the average of the high and low market price of the Company’ s
common stock on the date of grant. Compensation expense is recognized ratably over the requisite service period based on
those PVRSUs that ultimately vest.
The following table is a summary of activity related to PVRSU grants during the year ended December 31, 2007,
2006 and 2005:
2007
2006
2005
Performance vested restricted stock units granted ..................................................................... 21,141 49,780 —
Weighted average grant date fair value per share ...................................................................... $ 40.75
$ 46.22 —
Aggregate grant date fair value ($000) ...................................................................................... $ 862
$ 2,301 —
Shares forfeited.......................................................................................................................... 2,933
— —
Fair value of shares vested ($000) ............................................................................................. —
— —
Requisite service period............................................................................................................. 3 years
3-4 years —
83