Pitney Bowes 2009 Annual Report Download - page 82

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PITNEY BOWES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollars in thousands, except per share data)
64
Capitalized stock-based compensation costs at December 31, 2009 and 2008 were not material.
At December 31, 2009, $4.2 million of unrecognized compensation cost related to non-vested stock options is expected to be
recognized over a weighted average period of 1.3 years. At December 31, 2009, $23.0 million of unrecognized compensation cost
related to non-vested restricted stock units is expected to be recognized over a weighted average period of 1.7 years.
No options were exercised during 2009. The total intrinsic value of options exercised during the years ended 2008 and 2007, was $1.1
million and $28.1 million, respectively. The total intrinsic value of restricted stock units converted during 2009 was $5.2 million.
Proceeds from issuance of stock in our Consolidated Statements of Cash Flows for 2009, 2008 and 2007 include $0.0 million, $5.0
million and $3.4 million, respectively, of windfall tax benefits from stock options exercised and restricted stock units converted.
We settle employee stock compensation awards with treasury shares.
Our stock-based compensation awards require a minimum requisite service period of one year for retirement eligible employees to
vest.
At December 31, 2009, there were 15,102,457 shares available for future grants of stock options and restricted stock units under our
stock plans.
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.
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 from 2005 through 2008 generally become exercisable in four equal installments during the first
four years following their grant and expire ten years from the date of grant. Options granted on or after 2009 generally become
exercisable in three equal installments during the first three years following their grant and expire ten years from the date of grant.
The following tables summarize information about stock option transactions during 2009:
Shares
Per share weighted
average exercise price
Options outstanding at December 31, 2008 18,808,070 $42.50
Granted 1,638,709 $24.75
Exercised - -
Canceled (2,663,460) $58.14
Forfeited (203,240) $32.71
Options outstanding at December 31, 2009 17,580,079 $38.59
Shares
Per share weighted
average exercise price
Options exercisable at December 31, 2009 13,756,746 $39.93
We granted 2,126,310 and 1,488,387 options in 2008 and 2007, respectively. The weighted average exercise price of the options
granted was $36.74 and $47.17 in 2008 and 2007, respectively.
The weighted-average remaining contractual life of the total options outstanding and options exercisable at December 31, 2009 was
4.3 years and 3.2 years, respectively. The total options outstanding and exercisable at December 31, 2009 had no intrinsic value.