Motorola 2014 Annual Report Download - page 78

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76
Restricted stock and restricted stock unit activity was as follows (in thousands, except fair value and employee data):
2014 2013 2012
Years ended December 31 RS and
RSU
Wtd. Avg.
Grant
Date Fair
Value RS and
RSU
Wtd Avg.
Grant
Date Fair
Value RS and RS
U
Wtd Avg.
Grant
Date Fair
Value
RS and RSU outstanding at January 1 3,728 $ 49 6,299 $ 41 8,990 $ 40
Granted 1,235 63 1,558 54 1,657 49
Vested (2,445) 48 (3,610) 38 (3,845) 41
Terminated, canceled or expired (765) 54 (519) 45 (503) 33
RS and RSU outstanding at December 31 1,753 58 3,728 49 6,299 41
Approx. number of employees granted RS
and RSUs 1,979 2,295 2,355
At December 31, 2014, the Company had unrecognized compensation expense related to RS and RSUs of $65 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 RSU shares vested during the years ended December 31, 2014, 2013 and 2012 was $160 million, $138 million
and $144 million, respectively. The aggregate fair value of outstanding RS and RSUs as of December 31, 2014 was $110 million.
Total Share-Based Compensation Expense
Compensation expense for the Company’s employee stock options, stock appreciation rights, employee stock purchase
plans, RS and RSUs was as follows:
Years ended December 31 2014 2013 2012
Share-based compensation expense included in:
Costs of sales $ 10 $ 16 $ 20
Selling, general and administrative expenses 61 73 88
Research and development expenditures 23 31 38
Share-based compensation expense included in Operating earnings 94 120 146
Tax benefit 30 37 49
Share-based compensation expense, net of tax $ 64 $ 83 $ 97
Decrease in basic earnings per share $ (0.28) $ (0.31) $ (0.33)
Decrease in diluted earnings per share $ (0.28) $ (0.31) $ (0.33)
Share-based compensation expense in discontinued operations $ 20 $ 33 $ 38
At December 31, 2014 and 2013, 19.7 million and 20.4 million shares, respectively, were available for future share-based
award grants under the current share-based compensation plan, covering all equity awards to employees and non-employee
directors.
Motorola Solutions Incentive Plans
The Company's incentive plans provide eligible employees with an annual payment, calculated as a percentage of an
employee’s eligible earnings, in the year after the close of the current calendar year if specified business goals and individual
performance targets are met. The expense for awards under these incentive plans for the years ended December 31, 2014,
2013 and 2012 was $53 million, $87 million and $145 million, respectively.
Long-Range Incentive Plan
The Long-Range Incentive Plan (“LRIP”) rewards participating elected officers for the Company’s achievement of specified
business goals during the period, based on a single performance objective measured over a three year period. The expense for
LRIP for the years ended December 31, 2014, 2013 and 2012 was $3 million, $4 million and $9 million, respectively.
9. Fair Value Measurements
The Company holds certain fixed income securities, equity securities and derivatives, which are recognized and disclosed
at fair value in the financial statements on a recurring basis. Fair value is defined as the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. Fair value
is measured using the fair value hierarchy and related valuation methodologies as defined in the authoritative literature. This
guidance specifies a hierarchy of valuation techniques based on whether the inputs to each measurement are observable or
unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the