ManpowerGroup 2004 Annual Report Download - page 79

MANPOWER INC. 2004 Annual Report77
The new agreement requires, among other things, that we comply with a Debt-to-EBITDA ratio of less than 3.25 to 1
and a fixed charge ratio of greater than 2.00 to 1. As defined in the agreement, we had a Debt-to-EBITDA ratio of 1.84
to 1 and a Fixed Charge Ratio of 2.69 to 1 as of December 31, 2004.
There were no borrowings outstanding under our commercial paper program at December 31, 2004 and 2003, respectively.
Swap Agreements
We have entered into various interest rate swap agreements to manage the interest rate and currency risk associated
with our debt instruments. (See note 13 for further information.)
Fair Value of Debt
The carrying value of Long-Term Debt approximates fair value, except for the Euro-denominated notes and the
Debentures, which had a fair value, as determined by quoted market prices, as of December 31, as follows:
2004 2003
Euro-denominated notes $ 486.1 $ 456.7
Zero-coupon convertible debentures 299.8 303.2
Debt Maturities
The maturities of Long-Term Debt payable within each of the four years subsequent to December 31, 2005 are as
follows: 2006 – $539.0, 2007 – $0.6, 2008 – $1.0, 2009 – $135.5, and none thereafter.
08.
STOCK COMPENSATION PLANS
In April 2003, our shareholders approved the 2003 Equity Incentive Plan of Manpower Inc. (“2003 Plan”) which authorized
4,500,000 shares for grant. Under this plan, all of our full-time employees and non-employee directors are eligible to
receive stock options, stock appreciation rights, restricted stock and deferred stock. As of December 31, 2004, we
had approximately 3,353,000 shares of common stock remaining available for grant under this plan. As a result of the
adoption of this plan, we no longer make any grants under our 1994 Executive Stock Option and Restricted Stock Plan.
Awards may be granted under the plan to eligible employees at the discretion of the plan administrator, which may be the
Board of Directors or a committee of the Board of Directors. All options and stock appreciation rights are granted at a
price determined by the administrator, not less than 100% of the fair market value of the common stock at the date of
grant. The administrator also determines the period during which options and stock appreciation rights are exercisable and
when restricted stock vests. Generally, options are granted with a vesting period of up to four years and expire ten years
from the date of grant. As of December 31, 2004, no stock appreciation rights had been granted or were outstanding.
Under the current compensation arrangement, all of our non-employee directors may elect to receive deferred stock in
lieu of the portion of the annual cash retainer as to which there was not an election in effect as of July 29, 2003 under
the prior compensation arrangement. Non-employee directors who were in office prior to July 29, 2003 for whom an
election was not in effect through November 4, 2006 will continue to have the right to elect to receive an option to
purchase shares of our common stock under the prior compensation arrangement, with respect to a portion of the
annual cash retainer through November 2006. The number of shares of deferred stock is determined pursuant to a
formula set forth in the terms and conditions adopted under the 2003 Plan and the number of shares covered by the
option are determined in accordance with the terms of the prior compensation arrangement. Deferred stock is settled
in shares of common stock following the directors’ termination from the board. Non-employee directors also receive
an annual option grant as additional compensation for board service. The per share purchase price for each option
awarded is equal to the fair market value of our common stock at the date of grant. Options are exercisable for the
vested portion during the director’s tenure and a limited period thereafter.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
in millions, except share and per share data