ManpowerGroup 2013 Annual Report Download - page 66

ManpowerGroup 2013 Annual Report Notes to Consolidated Financial Statements
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
in millions, except share and per share data
Options outstanding and exercisable as of December 31, 2013 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
$27–$34 204 4.6 $30 204 $30
$35–$44 342 5.8 44 164 44
$45–$55 991 5.8 53 625 53
$56–$93 1,246 3.8 67 1,160 67
2,783 5.1 $57 2,153 $58
We have recognized expense of $7.5, $9.4 and $12.1 related to stock options for the years ended December 31, 2013, 2012
and 2011, respectively. The total fair value of options vested during the same periods was $9.0, $11.4 and $14.3, respectively.
As of December 31, 2013, total unrecognized compensation cost was approximately $6.5, net of estimated forfeitures,
which we expect to recognize over a weighted-average period of approximately 1.3 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 2013 2012 2011
Average risk-free interest rate 1.1%1.1% 2.6%
Expected dividend yield 1.7%1.8% 1.1%
Expected volatility 42.0%44.0% 41.0%
Expected term (years) 5.9 5.9 5.9
The average risk-free interest rate is based on the five-year United States 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 five 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 reflects
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 per option granted
during the year was $17.99, $15.88 and $25.21 in 2013, 2012 and 2011, 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 subsequently under the 2011 Plan and the deferred stock is settled in shares
of common stock according to these terms and conditions. As of December 31, 2013, 2012 and 2011, there were 31,733,
28,400 and 23,566, 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 and the 2011 Plan. As of December 31, 2013, 2012 and 2011, there were 14,844, 14,685 and 8,732,
respectively, shares of deferred stock and 14,844, 20,559 and 9,978, respectively, shares of restricted stock granted under
this arrangement, all of which are vested. We recognized expense of $0.9, $0.8 and $0.8 related to deferred stock in 2013,
2012 and 2011, respectively.