Lexmark 2009 Annual Report Download - page 105

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A summary of the status of the Company’s stock-based compensation plans as of December 31, 2009,
2008 and 2007, and changes during the years then ended is presented below:
Options
(In Millions)
Weighted
Average
Exercise
Price
(Per Share)
Weighted
Average
Remaining
Contractual
Life (Years)
Aggregate
Intrinsic
Value
(In Millions)
Outstanding at December 31, 2006 . . . . . . . . . . 11.4 $67.65 5.6 $138.2
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.6 60.39
Exercised. . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.3) 34.02
Forfeited or canceled . . . . . . . . . . . . . . . . . . . (0.5) 78.39
Outstanding at December 31, 2007 . . . . . . . . . . 11.2 $67.82 4.9 $ 2.2
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.6 32.89
Exercised. . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.2) 23.25
Forfeited or canceled . . . . . . . . . . . . . . . . . . . (1.1) 70.42
Outstanding at December 31, 2008 . . . . . . . . . . 10.5 $66.16 4.3 $ —
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.6 17.12
Exercised. . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0 —
Forfeited or canceled . . . . . . . . . . . . . . . . . . . (1.5) 65.15
Outstanding at December 31, 2009 . . . . . . . . . . 9.6 $63.46 4.0 $ 5.0
Exercisable at December 31, 2007 . . . . . . . . . . 9.5 $68.52 4.5 $ 2.2
Exercisable at December 31, 2008 . . . . . . . . . . 9.2 $68.14 3.8 $ —
Exercisable at December 31, 2009 . . . . . . . . . . 8.5 $67.92 3.4 $ —
There were no options exercised during 2009. For the years ended December 31, 2008 and 2007, the total
intrinsic value of options exercised was $1.8 million and $7.7 million, respectively. As of December 31,
2009, the Company had $4.2 million of total unrecognized compensation expense, net of estimated
forfeitures, related to unvested stock options that will be recognized over the weighted average period of
2.6 years.
Restricted Stock and Deferred Stock Units
Lexmark has granted RSUs with various vesting periods and generally these awards vest based upon
continued service with the Company or continued service on the Board of Directors. As of December 31,
2009, the Company has issued DSUs to certain members of management who elected to defer all or a
portion of their annual bonus into such units and to certain nonemployee directors who elected to defer all
or a portion of their annual retainer, chair retainer and/or meeting fees into such units. These DSUs are
100% vested when issued. The Company has also issued supplemental DSUs to certain members of
management upon the election to defer all or a portion of an annual bonus into DSUs. These supplemental
DSUs vest at the end of five years based upon continued employment with the Company. The cost of the
RSUs and supplemental DSUs, generally determined to be the fair market value of the shares at the date
of grant, is charged to compensation expense ratably over the vesting period of the award.
During 2009 a certain number of senior managers of the Company were also granted additional RSU
awards having a performance condition, which could range from 78,339 RSUs to 235,014 RSUs
depending on the level of achievement. The performance measure selected to indicate the level of
achievement is return on net assets minus cash and marketable securities. The performance period ended
on December 31, 2009. The Company’s assessment as of December 31, 2009 is that the minimum level of
achievement has not been met and as a result these awards were cancelled.
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