National Oilwell Varco 2012 Annual Report Download - page 93

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Index to Financial Statements
At December 31, 2011, total unrecognized compensation cost related to nonvested stock options was $68 million. This cost is expected to be recognized over a
weighted-average period of two years. The total fair value of stock options vested in 2011, 2010 and 2009 was approximately $54 million, $78 million and $40 million,
respectively. Cash received from option exercises for 2011, 2010 and 2009 was $96 million, $73 million and $8 million, respectively. The actual tax benefit realized for the
tax deductions from option exercises totaled $43 million, $16 million and $2 million for 2011, 2010 and 2009, respectively. Cash used to settle equity instruments granted
under all share-based payment arrangements for 2011, 2010 and 2009 was not material for any period.
Restricted Shares
The Company issues restricted stock awards and restricted stock units with no exercise price to officers and key employees in addition to stock options. Out of the total
number of restricted stock awards and restricted stock units granted, 234,620 were granted on February 22, 2011 and vest on the third anniversary of the date of grant. In
addition, on May 19, 2011, 8,505 restricted stock awards were granted to the non-employee members of the Board of Directors. These restricted stock awards vest in equal
thirds over three years on the anniversary of the grant date. Performance-based restricted stock awards of 131,300 were granted on February 22, 2011. The performance-based
restricted stock awards granted will be 100% vested 36 months from the date of grant, subject to the performance condition of the Companyî‚€s operating income growth,
measured on a percentage basis, from January 1, 2011 through December 31, 2013 exceeding the median operating income level growth of a designated peer group over the
same period. The estimated forfeiture rate of restricted stock awards and restricted stock units is factored into the share-based compensation expense the Company recognizes.
The following summary presents information regarding outstanding restricted:
Restricted Shares Units
Weighted-Average
Grant Date
Fair Value
Nonvested at December 31, 2008 1,460,496 $ 47.34
Granted 762,692 $ 26.02
Vested (7,322) $ 36.05
Forfeited (34,622) $ 41.52
Nonvested at December 31, 2009 2,181,244 $ 40.51
Granted 558,531 $ 43.99
Vested (921,454) $ 43.28
Forfeited (52,484) $ 35.11
Nonvested at December 31, 2010 1,765,837 $ 42.15
Granted 374,425 $ 79.53
Vested (496,642) $ 64.22
Forfeited (37,573) $ 44.02
Nonvested at December 31, 2011 1,606,047 $ 44.21
The weighted-average grant day fair value of restricted stock awards and restricted stock units granted during the years ended 2011, 2010 and 2009 was $79.53, $43.99 and
$26.02 per share, respectively. There were 496,642; 921,454 and 7,322 restricted stock awards that vested during 2011, 2010 and 2009, respectively. At December 31, 2011,
there was $30 million of unrecognized compensation cost related to nonvested restricted stock awards and restricted stock units, which is expected to be recognized over a
weighted-average period of two years.
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