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PITNEY BOWES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollars in thousands, except per share data)
66
Incentive Awards
Long-term incentive awards are provided to employees under the terms of our plans. The Executive Compensation Committee of the
Board of Directors administers these plans. Awards granted under these plans may include stock options, restricted stock units, other
stock based awards, cash or any combination thereof.
Effective in 2006, we changed the components of our long-term incentive compensation structure. This change increased the amount
of restricted stock units and cash incentive awards issued to employees and reduced the number of stock options granted.
We have the following stock plans that are described below: the U.S. and U.K. Stock Option Plans (ESP), the U.S. and U.K.
Employee Stock Purchase Plans (ESPP), and the Directors’ Stock Plan.
Stock Options
Under our stock plan, certain officers and employees are granted options at prices equal to the market value of our common shares at
the date of grant. Options granted in 2004 and prior thereto generally became exercisable in three equal installments during the first
three years following their grant and expire after ten years. Options granted in 2005 and thereafter generally become exercisable in
four equal installments during the first four years following their grant and expire ten years from the date of grant.
The following tables summarize information about stock option transactions during 2008:
Shares
Per share weighted
average exercise price
Options outstanding at December 31, 2007 18,742,518 $43.23
Granted 2,126,310 $36.74
Exercised (216,318) $30.24
Canceled (1,667,342) $45.07
Forfeited (177,098)
$42.06
Options outstanding at December 31, 2008 18,808,070 $42.50
Shares
Per share weighted
average exercise price
Options exercisable at December 31, 2008 14,551,367 $42.87
We granted 1,488,387 and 1,967,993 options in 2007 and 2006, respectively. The weighted average exercise price of the options
granted was $47.17 and $42.00, respectively.
The weighted-average remaining contractual life of the total options outstanding and options exercisable at December 31, 2008 was
4.3 years and 3.2 years, respectively. The total options outstanding and exercisable at December 31, 2008 have no intrinsic value.
The weighted average remaining contractual life of the options outstanding and options exercisable at December 31, 2007 was 4.3
years and 3.3 years, respectively. The intrinsic value of the total options outstanding and options exercisable at December 31, 2007
was $97.4 million and $67.6 million, respectively.