Lexmark 2008 Annual Report Download - page 86

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A summary of the status of the Company’s RSU and DSU grants as of December 31, 2008, 2007 and 2006,
and changes during the years then ended is presented below:
Units
(In Millions)
Weighted
Average
Grant Date
Fair Value
(Per Share)
Weighted
Average
Remaining
Contractual
Life (Years)
Aggregate
Intrinsic Value
(In Millions)
RSUs and DSUs at December 31, 2005 . . . . 0.4 $54.55 4.2 $18.4
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.6 48.75
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.1) 35.52
Forfeited or canceled . . . . . . . . . . . . . . . . . (0.1) 54.89
RSUs and DSUs at December 31, 2006 . . . . 0.8 $52.84 3.5 $61.9
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.5 56.08
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.1) 58.62
Forfeited or canceled . . . . . . . . . . . . . . . . . — 54.43
RSUs and DSUs at December 31, 2007 . . . . 1.2 $53.79 2.6 $42.6
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.6 33.21
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.2) 51.97
Forfeited or canceled . . . . . . . . . . . . . . . . . (0.1) 52.48
RSUs and DSUs at December 31, 2008 . . . . 1.5 $45.84 2.3 $39.7
For the years ended December 31, 2008, 2007 and 2006, the total fair value of RSUs and DSUs that
vested was $8.4 million, $3.2 million and $4.9 million, respectively. As of December 31, 2008, the Company
had $30.7 million of total unrecognized compensation expense, net of estimated forfeitures, related to
RSUs and DSUs that will be recognized over the weighted average period of 3.0 years.
Employee Stock Purchase Plan
The Company discontinued the Employee Stock Purchase Plan (“ESPP”) as of December 31, 2007.
Employees enrolled in the ESPP during the offering period that ended December 31, 2007, qualified for the
final ESPP purchase executed in the first quarter of 2008 according to the plan provisions described below.
The Company’s ESPP enabled substantially all regular employees to purchase full or fractional shares of
Lexmark Class A Common Stock through payroll deductions of up to 10% of eligible compensation. Effective
January 1, 2006, the ESPP was amended whereby the share price paid by an employee was 85% of the
closing market price on the last business day of the respective offering period. Prior to January 1, 2006, the
share price paid by an employee was 85% of the lesser of the closing market price on (i) the last business day
immediately preceding the first day of the respective offering period and (ii) the last business day of the
respective offering period. The ESPP provided semi-annual offering periods beginning each January 1 and
July 1.
During the years ended December 31, 2008, 2007 and 2006, employees paid the Company $2.1 million,
$5.6 million and $6.2 million, respectively, to purchase approximately 0.1 million shares during each of
these years. During 2008, 2007 and 2006, the Company recognized approximately $0.3 million,
$0.9 million and $1.9 million of compensation expense related to ESPP activity as required under
SFAS 123R. Compensation expense was calculated using the fair value of the employees’ purchase
rights under the Black-Scholes model.
6. MARKETABLE SECURITIES
The Company evaluates its marketable securities in accordance with SFAS No. 115, Accounting for
Certain Investments in Debt and Equity Securities, and has determined that all of its investments in
marketable securities should be classified as available-for-sale and reported at fair value, with unrealized
gains and losses recorded in Accumulated other comprehensive earnings (loss). At December 31, 2008,
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