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PITNEY BOWES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollars in thousands, except per share amounts)
64
Stock Plans
We have a long-term incentive program whereby eligible employees may be granted restricted stock units, non-qualified stock options,
other stock-based awards, cash or any combination thereof. The Executive Compensation Committee of the Board of Directors administers
these plans. We settle employee stock compensation awards with treasury shares. At December 31, 2013, there were 19,180,600 shares
available for future grants under our long-term incentive program.
Restricted Stock Units
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 the stock price on the grant date less the present
value of expected dividends. The following table summarizes information about restricted stock units during 2013 and 2012:
2013 2012
Shares
Weighted
average grant
date fair value Shares
Weighted
average grant
date fair value
Restricted stock units outstanding at beginning of the year 1,909,160 $ 17.68 1,629,055 $ 22.33
Granted 1,365,798 10.37 999,381 14.72
Vested (1,049,572) 17.52 (598,543) 22.27
Forfeited (284,074) 13.33 (120,733) 18.75
Restricted stock units outstanding at end of the year 1,941,312 $ 13.19 1,909,160 $ 17.68
At December 31, 2013, there was $12 million of unrecognized compensation cost related to restricted stock units that is expected to be
recognized over a weighted-average period of 2.2 years. The intrinsic value of restricted stock units outstanding at December 31, 2013
was $45 million. The intrinsic value of restricted stock units vested during 2013, 2012 and 2011 was $15 million, $11 million and $13
million, respectively. The fair value of restricted stock units vested during 2013, 2012 and 2011 was $18 million, $13 million and $15
million, respectively.
Market Stock Units
Each market stock unit award entitles the holder to receive a number of shares, adjusted for the attainment of certain performance and
market conditions. The award vests at the end of a three-year performance period and the actual number of shares the recipient receives
may range from 50% to 200% of the shares awarded. The expense for these awards, net of estimated forfeitures, is recorded over the
performance period based on the fair value of the award, which was determined on the grant date using a Monte Carlo simulation model.
There were no market stock units awarded during 2013.
The following table summarizes information about market stock units during 2013 and 2012:
2013 2012
Shares
Weighted
average grant
date fair value Shares
Weighted
average grant
date fair value
Market stock units outstanding at beginning of the year 198,145 $ 17.91 —$ —
Granted ——
205,013 17.91
Forfeited (9,718) 17.91 (6,868) 17.91
Market stock units outstanding at the end of the year 188,427 $ 17.91 198,145 $ 17.91
The fair value of market stock units granted in 2012 was determined based on the following assumptions:
Expected dividend yield 6.7%
Expected stock price volatility 29.7%
Risk-free interest rate 0.4%
At December 31, 2013, there was less than $1 million of unrecognized compensation cost related to market stock units that is expected
to be recognized over a weighted-average period of 1.1 years. The intrinsic value of market stock units outstanding at December 31, 2013
was $4 million.