NT » Topics » PSUs

This excerpt taken from the NT 10-Q filed May 11, 2009.

PSUs

Relative Shareholder Return Metric Awards (“PSU-rTSRs”)

The following is a summary of the total number of outstanding share-based PSU-rTSRs as of the following dates:

 

     PSU-rTSR
     PSU-rTSR
Awards
Granted
(Thousands) (a)
    Weighted-
Average
Grant Date
Fair Value
   Weighted-
Average
Contractual
Life

(In Years)

Balance as of December 31, 2008

   1,554     $ 14.47    1.3

Awards forfeited

   (1,554 )     14.47   
                 

Balance as of March 31, 2009

   —       $ —      —  
                 

 

(a) Does not include cash-settled PSU-rTSR awards granted by Nortel.

 

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Management Operating Margin Metric Awards (“PSU-Management OMs”)

The following is a summary of the total number of outstanding share-based PSU-Management OMs as of the following dates:

 

     PSU-Management OM
     Awards
Granted
(Thousands)
    Weighted-
Average
Grant Date
Fair Value
   Weighted -
Average
Contractual
Life

(In Years)

Balance as of December 31, 2008

   1,223     $ 7.91    2.0

Awards forfeited

   (189 )     8.05   

Awards cancelled

   (1,034 )     7.89   
                 

Balance as of March 31, 2009

   —       $ —      —  
                 
These excerpts taken from the NT 10-K filed Feb 27, 2008.
PSUs
 
PSUs are settled with Nortel Networks Corporation common shares and are valued using a Monte Carlo simulation model. The extent to which PSUs vest and settle at the end of a three year performance period will depend upon the level of achievement of certain market performance criteria based on the total shareholder return on the Nortel Networks Corporation common shares compared to the total shareholder return on the common shares of a comparative group of companies included in the Dow Jones Technology Titans Index (the “Technology Index”). The number of awards expected to be earned, based on achievement of the PSU market condition, is factored into the grant date Monte Carlo valuation of the PSU award. The grant date fair value is not subsequently adjusted regardless of the eventual number of awards that are earned based on the market condition. Compensation expense is recognized on a straight-line basis over the three-year vesting period. Compensation expense is reduced for estimated PSU awards that will not vest due to not meeting continued employment vesting conditions. All PSUs currently granted have been classified as equity instruments as their terms require that they be settled in shares.


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NORTEL NETWORKS CORPORATION
 
Notes to Consolidated Financial Statements — (Continued)
 
PSUs


 



PSUs are settled with Nortel Networks Corporation common shares
and are valued using a Monte Carlo simulation model. The extent
to which PSUs vest and settle at the end of a three year
performance period will depend upon the level of achievement of
certain market performance criteria based on the total
shareholder return on the Nortel Networks Corporation common
shares compared to the total shareholder return on the common
shares of a comparative group of companies included in the Dow
Jones Technology Titans Index (the “Technology
Index”). The number of awards expected to be earned, based
on achievement of the PSU market condition, is factored into the
grant date Monte Carlo valuation of the PSU award. The grant
date fair value is not subsequently adjusted regardless of the
eventual number of awards that are earned based on the market
condition. Compensation expense is recognized on a straight-line
basis over the three-year vesting period. Compensation expense
is reduced for estimated PSU awards that will not vest due to
not meeting continued employment vesting conditions. All PSUs
currently granted have been classified as equity instruments as
their terms require that they be settled in shares.





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NORTEL
NETWORKS CORPORATION




 




Notes to
Consolidated Financial
Statements — (Continued)


 




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