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PITNEY BOWES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollars in thousands, except per share data)
60
Stock Plans
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 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, 2010, there were 17,458,044 shares available for future grants of stock options and restricted stock units under our
stock plans.
Stock Options
Under our stock option 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 activity during 2010:
Shares
Per share weighted
average exercise price
Options outstanding at December 31, 2009 17,580,079 $38.59
Granted 1,714,731 $22.09
Exercised - -
Cancelled (4,350,018) $37.34
Forfeited (438,270) $26.58
Options outstanding at December 31, 2010 14,506,522 $37.38
Options exercisable at December 31, 2010 10,986,577 $40.35
The weighted average remaining contractual life of options outstanding and options exercisable at December 31, 2010 was 4.9 years
and 3.8 years, respectively. The options exercisable at December 31, 2010 had no intrinsic value. No options were exercised during
2010 and 2009. The total intrinsic value of options exercised during 2008 was $1.1 million.
We granted 1,638,709 and 2,126,310 options in 2009 and 2008, respectively. The weighted average exercise price of the options
granted was $24.75 and $36.74 in 2009 and 2008, respectively. The weighted average remaining contractual life of the 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.