Verizon Wireless 2008 Annual Report Download - page 61

Notes to Consolidated Financial Statements continued
59
The following table summarizes Verizon’s Restricted Stock Unit activity:
(shares in thousands)
Restricted
Stock Units
Weighted-
Average
Grant-Date
Fair Value
Outstanding, January 1, 2006 6,869 $ 36.12
Granted 9,116 31.88
Cancelled/forfeited (392) 35.01
Outstanding, December 31, 2006 15,593 33.67
Granted 6,779 37.59
Payments (602) 36.75
Cancelled/forfeited (197) 34.81
Outstanding, December 31, 2007 21,573 34.80
Granted 7,277 36.64
Payments (6,869) 36.06
Cancelled/forfeited (161) 35.45
Outstanding, December 31, 2008 21,820 35.01
Performance Share Units
The Plan also provides for grants of PSUs that generally vest at the end
of the third year after the grant. As defined by the Plan, the Human
Resources Committee of the Board of Directors determines the number
of PSUs a participant earns based on the extent to which the corre-
sponding goals have been achieved over the three-year performance
cycle. All payments are subject to approval by the Human Resources
Committee. The PSUs are classified as liability awards because the PSU
awards are paid in cash upon vesting. The PSU award liability is measured
at its fair value at the end of each reporting period and, therefore, will
fluctuate based on the price of Verizon’s stock as well as performance
relative to the targets. Dividend equivalent units are also paid to partici-
pants at the time that the PSU award is determined and paid, and in the
same proportion as the PSU award.
The following table summarizes Verizon’s Performance Share Unit
activity:
(shares in thousands)
Performance
Share Units
Weighted-
Average
Grant-Date
Fair Value
Outstanding, January 1, 2006 19,091 $ 36.84
Granted 14,166 32.05
Payments (3,607) 38.54
Cancelled/forfeited (1,227) 37.25
Outstanding, December 31, 2006 28,423 34.22
Granted 10,371 37.59
Payments (5,759) 36.75
Cancelled/forfeited (900) 36.18
Outstanding, December 31, 2007 32,135 34.80
Granted 11,194 36.64
Payments (7,597) 36.06
Cancelled/forfeited (2,518) 36.00
Outstanding, December 31, 2008 33,214 35.04
As of December 31, 2008, unrecognized compensation expense related
to the unvested portion of Verizon’s RSUs and PSUs was approximately
$308 million and is expected to be recognized over a weighted-average
period of approximately two years.
Shareowners’ Investment
Our certificate of incorporation provides authority for the issuance of up
to 250 million shares of Series Preferred Stock, $.10 par value, in one or
more series, with such designations, preferences, rights, qualifications,
limitations and restrictions as the Board of Directors may determine.
We are authorized to issue up to 4.25 billion shares of common stock.
On February 7, 2008, the Board of Directors approved a share buy back
program which authorized the repurchase of up to 100 million shares
of Verizon common stock terminating no later than the close of busi-
ness on February 28, 2011. During 2008, 2007 and 2006, we repurchased
approximately 37 million, 68 million and 50 million common shares
under programs previously authorized by the Board of Directors.
NOTE 14
STOCKBASED COMPENSATION
Refer to Note 1 for a discussion of the adoption of SFAS No. 123(R), which
was effective January 1, 2006.
Verizon Communications Long Term Incentive Plan
The Verizon Communications Long Term Incentive Plan (the Plan), per-
mits the granting of nonqualified stock options, incentive stock options,
restricted stock, restricted stock units, performance shares, performance
share units and other awards. The maximum number of shares for awards
is 207 million.
Restricted Stock Units
The Plan provides for grants of RSUs that generally vest at the end of
the third year after the grant. The RSUs are classified as liability awards
because they will be paid in cash upon vesting. The RSU award liability is
measured at its fair value at the end of each reporting period and, there-
fore, will fluctuate based on the performance of Verizon’s stock. Dividend
equivalent units are also paid to participants at the time the RSU award
is paid.