UPS 2008 Annual Report Download - page 95

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes information about stock options outstanding and exercisable at
December 31, 2008:
Options Outstanding Options Exercisable
Exercise Price Range
Shares
(in thousands)
Average Life
(in years)
Average
Exercise
Price
Shares
(in thousands)
Average
Exercise
Price
$30.00 - $50.00 ............................ 996 0.87 $49.97 996 $49.97
$50.01 - $60.00 ............................ 2,300 2.21 56.97 2,300 56.97
$60.01 - $70.00 ............................ 5,166 3.78 61.21 5,166 61.21
$70.01 - $80.00 ............................ 7,568 6.82 71.23 1,385 71.26
$80.01 - $120.00 ........................... 2,267 7.33 80.92 316 80.88
18,297 5.12 $66.65 10,163 $61.13
Restricted Performance Units
We issue restricted performance units (“RPUs”) under the Incentive Compensation Plan. Upon vesting,
RPUs result in the issuance of the equivalent number of UPS class A common shares after required tax
withholdings. Persons earning the right to receive RPUs are determined each year by the Compensation
Committee. Except in the case of death, disability, or retirement, all RPUs granted prior to 2008 vest five years
after the date of grant. Beginning in 2008, RPU awards granted will generally vest over a five year period with
approximately 20% of the award vesting at each anniversary date of the grant. All RPUs granted are subject to
earlier cancellation or vesting under certain conditions. Dividends earned on RPUs are reinvested in additional
restricted performance units at each dividend payable date. RPUs granted to eligible employees will generally be
granted annually during the second quarter of each year at the discretion of the Compensation Committee.
As of December 31, 2008, we had the following nonvested RPUs outstanding, including reinvested
dividends:
Shares
(in thousands)
Weighted
Average
Grant Date
Fair Value
Weighted Average Remaining
Contractual Term (in years)
Aggregate Intrinsic
Value (in millions)
Nonvested at January 1, 2008 ........ 4,417 $71.50
Vested .......................... (1,519) 64.36
Granted ......................... 2,287 71.06
Reinvested Dividends .............. 194 N/A
Forfeited / Expired ................ (93) 72.00
Nonvested at December 31, 2008 ..... 5,286 72.88 2.09 $292
RPUs Expected to Vest ............. 4,887 72.96 2.00 $270
The fair value of each RPU is the NYSE closing price on the date of grant. The weighted-average grant date
fair value of RPUs granted during 2008, 2007, and 2006 was $71.06, $70.90, and $80.88, respectively. The total
fair value of RPUs vested during 2008, 2007, and 2006 was $83, $19, and $13 million, respectively. As of
December 31, 2008, there was $170 million of total unrecognized compensation cost related to nonvested RPUs.
That cost is expected to be recognized over a weighted average period of 3 years and 6 months.
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