ManpowerGroup 2009 Annual Report Download - page 57

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55
Notes to Consolidated Financial Statements Manpower 2009 Annual Report
Options outstanding and exercisable as of December 31, 2009 are as follows:
Options Outstanding Options Exercisable
Exercise Price Shares (000)
Weighted-
Average
Remaining
Contractual
Life (years)
Weighted-
Average
Exercise Price Shares (000)
Weighted-
Average
Exercise Price
$9-$34 2,264 6.2 $ 31 934 $ 33
$35-$44 1,178 4.4 44 1,173 44
$45-$55 898 5.9 52 641 52
$56-$93 1,518 7.5 66 582 70
5,858 6.1 $ 46 3,330 $ 47
We have recognized expense of $12.7, $14.0 and $13.3 related to stock options for the years ended December 31, 2009,
2008 and 2007, respectively. The total fair value of options vested during the same periods were $13.3, $12.5 and $12.8,
respectively. As of December 31, 2009, total unrecognized compensation cost was approximately $23.1, net of estimated
forfeitures, which we expect to recognize over a weighted-average period of approximately 1.7 years.
We estimated the fair value of each stock option on the date of grant using the Black-Scholes option pricing model and the
following assumptions:
Year Ended December 31 2009 2008 2007
Average risk-free interest rate 1.8% 2.7% 4.8%
Expected dividend yield 2.5% 1.2% 0.9%
Expected volatility 42.0% 30.0% 27.0%
Expected term (years) 5.5 4.9 4.7
The average risk-free interest rate is based on the fi ve-year U.S. Treasury security rate in effect as of the grant date. The
expected dividend yield is based on the expected annual dividend as a percentage of the market value of our common stock
as of the grant date. We determined expected volatility using a weighted average of daily historical volatility (weighted 75%) of
our stock price over the past fi ve years and implied volatility (weighted 25%) based upon exchange traded options for our
common stock. We believe that a blend of historical volatility and implied volatility better refl ects future market conditions and
better indicates expected volatility than considering purely historical volatility. We determined the expected term of the stock
options using historical data. The weighted-average grant-date fair value of options granted during the year was $9.73,
$15.17 and $22.27 in 2009, 2008 and 2007, respectively.
DEFERRED STOCK
Our non-employee directors may elect to receive deferred stock in lieu of part or all of their annual cash retainer otherwise
payable to them. 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 deferred stock is settled in shares of common stock according to the terms
and conditions under the 2003 Plan. As of December 31, 2009, 2008 and 2007, there were 17,288, 13,819 and 9,743
respectively, shares of deferred stock awarded under this arrangement, all of which are vested.
Non-employee directors also receive an annual grant of deferred stock (or restricted stock, if they so elect) as additional
compensation for board service. The award vests in one year in equal quarterly installments and the vested portion of the
deferred stock is settled in shares of common stock either upon a director’s termination of service or three years after the date of
grant (which may in most cases be extended at the directors’ election) in accordance with the terms and conditions under the
2003 Plan. As of December 31, 2009, 2008 and 2007, there were 13,378, 9,663 and 10,864, respectively, shares of deferred
stock and 14,710, 7,028 and 2,331, respectively, shares of restricted stock granted under this arrangement, all of which are
vested. We recognized expense of $0.7, $0.8 and $1.0 related to deferred stock in 2009, 2008 and 2007, respectively.
RESTRICTED STOCK
We grant restricted stock and restricted stock unit awards to certain employees and to non-employee directors who may
elect to receive restricted stock rather than deferred stock as described above. Restrictions lapse over periods ranging up to
six years. We value restricted stock awards at the closing market value of our common stock on the date of grant.