ManpowerGroup 2007 Annual Report Download - page 50

47
Manpower 2007 Annual Report
Notes to Consolidated Financial Statements
The Target Awards for the 2006-2008 and the 2007-2009 performance periods are based on average Operating Profi t Margin
growth over the performance period. In the event this measure exceeds the target, an additional number of shares up to 175%
of the Target Award may be granted. In the event this measure falls below the target performance level, a reduced number of
shares as few as the Threshold Award, which is equal to 25% of the Target Award, may be granted. If Operating Profi t Margin
falls below the threshold performance level, no shares will be granted.
A summary of the performance share unit activity is as follows:
Share Units
Outstanding, January 1, 2006 —
Granted 210,875
Forfeited (17,500)
Outstanding, December 31, 2006 193,375
Granted 118,000
Forfeited (13,125)
Outstanding, December 31, 2007 298,250
The Threshold, Target and Outstanding Award amounts for each outstanding grant are as follows:
2006 – 2008 2007 – 2009
Threshold Award 30,125 29,500
Target Award 120,500 118,000
Outstanding Award 210,875 206,500
We recognize compensation expense when it becomes probable that the performance criteria specifi ed in the award will be
achieved. The compensation expense is recognized over the performance period and is recorded in Selling and Administrative
Expenses. We currently believe the average Operating Profi t Margin growth for the 2006-2008 performance period will likely
exceed the target performance level; accordingly, we recognized compensation expense of $2.9 and $3.4 related to this
performance period in 2007 and 2006, respectively. We currently believe the average Operating Profi t Margin growth for the
2007-2009 performance period will likely approximate the target performance level; accordingly we recognized compensation
expense of $2.9 related to this performance period in 2007.
Other Stock Plans
Under the 1990 Employee Stock Purchase Plan, designated employees meeting certain service requirements may purchase
shares of our common stock through payroll deductions. These shares may be purchased at the lesser of 85% of their fair
market value at the beginning or end of each year.
The fair value of each share purchased under the plan is estimated using the Black-Scholes option-pricing model and the
following weighted-average assumptions:
Year Ended December 31 2007 2006 2005
Average risk-free interest rate 5.0% 4.4% 2.8%
Expected dividend yield 0.9% 1.1% 0.9%
Expected volatility 27.0% 30.0% 30.0%
Expected term (years) 1.0 1.0 1.0
These assumptions are determined using the same methodology applied in determining the assumptions used in calculating
the fair value of our stock options.
We recognized expense of $3.0 and $2.6 for shares purchased under the plan in 2007 and 2006, respectively.
We also maintain the Savings Related Share Option Scheme for U.K. employees with at least one year of service. The employees
are offered the opportunity to obtain an option for a specifi ed number of shares of common stock at not less than 85% of its
market value on the day prior to the offer to participate in the plan. Options vest after either three, fi ve or seven years, but may
lapse earlier. Funds used to purchase the shares are accumulated through specifi ed payroll deductions over a 60-month
period. We recognized expense of $0.2 and $0.3 for shares purchased under the plan in 2007 and 2006, respectively.