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PITNEY BOWES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollars in thousands, except per share data)
62
period, such period may not be less than three years. The compensation expense for each award is recognized over the service period.
We did not issue any shares for restricted stock awards during 2010 and 2009 and issued 10,000 restricted stock awards in 2008.
Restricted stock units are granted to employees and entitle the holder to shares of common stock as the units vest, typically over a four
year service period. The fair value of the units is determined on the grant date based on our stock price at that date. The following
table summarizes information about restricted stock units during 2010:
Units / Shares
Weighted average
grant date fair value
Restricted stock units outstanding at December 31, 2009 1,341,729 $30.55
Granted 923,676 $22.09
Vested (430,340) $33.17
Forfeited (197,823) $26.77
Restricted stock units outstanding at December 31, 2010 1,637,242 $25.55
We granted 867,129 shares and 512,415 shares of restricted stock units in 2009 and 2008, respectively. The weighted average grant
price was $24.39 and $36.91 for 2009 and 2008, respectively. The intrinsic value of the outstanding restricted stock units at
December 31, 2010 was $39.6 million, with a weighted average remaining term of 2.5 years. The total intrinsic value of restricted
stock units converted during 2010, 2009 and 2008 was $8.8 million, $5.2 million and $4.2 million, respectively.
Employee Stock Purchase Plans (ESPP)
Substantially all U.S. and Canadian employees can purchase shares of our common stock at an offering price of 95% of the average
price of our common stock on the New York Stock Exchange on the offering date. At no time will the exercise price be less than the
lowest price permitted under Section 423 of the Internal Revenue Code. We may grant rights to purchase up to 5,367,461 common
shares under the ESPP. We granted rights to purchase 318,556 shares, 540,660 shares and 437,350 shares in 2010, 2009 and 2008,
respectively.
Directors’ Stock Plan
Under this plan, each non-employee director is granted 2,200 shares of restricted common stock annually. We granted 26,400 shares
to non-employee directors in 2010, 2009 and 2008. Compensation expense, net of taxes, was $0.4 million, $0.4 million and $0.6
million for 2010, 2009 and 2008, respectively. The shares carry full voting and dividend rights but, except as provided herein, may
not be transferred or alienated until the later of (1) termination of service as a director, or, if earlier, the date of a change of control, or
(2) the expiration of the six-month period following the grant of such shares. If a director terminates service as a director prior to the
expiration of the six-month period following a grant of restricted stock, that award will be forfeited. The Directors’ Stock Plan
permits certain limited dispositions of restricted common stock to family members, family trusts or partnerships, as well as donations
to charity after the expiration of the six-month holding period, provided the director retains a minimum of 7,500 shares of restricted
common stock.