UPS 2009 Annual Report Download - page 105

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
We received cash of $27, $46, and $52 million during 2009, 2008, and 2007, respectively, from option
holders resulting from the exercise of stock options. We received a tax benefit of $1, $4, and $9 million during
2009, 2008, and 2007, respectively, from the exercise of stock options, which is reported as cash from financing
activities in the cash flow statement.
The total intrinsic value of options exercised during 2009, 2008, and 2007 was $5, $13, and $31 million,
respectively. As of December 31, 2009, there was $26 million of total unrecognized compensation cost related to
nonvested options. That cost is expected to be recognized over a weighted average period of 2 years.
The following table summarizes information about stock options outstanding and exercisable at
December 31, 2009:
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 ............................ 15 0.49 $47.89 15 $47.89
$50.01 - $60.00 ............................ 2,432 2.10 56.85 2,167 56.97
$60.01 - $70.00 ............................ 5,014 2.79 61.23 5,014 61.23
$70.01 - $80.00 ............................ 7,493 5.82 71.22 3,237 70.96
$80.01 - $90.00 ............................ 2,244 6.33 80.92 396 81.10
17,198 4.47 $67.52 10,829 $64.00
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, 2009, we had the following 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, 2009 ........ 5,286 $72.88
Vested .......................... (1,660) 70.60
Granted ......................... 2,548 55.83
Reinvested Dividends .............. 244 N/A
Forfeited / Expired ................ (57) 69.13
Nonvested at December 31, 2009 ..... 6,361 $67.25 1.84 $365
RPUs Expected to Vest ............. 6,056 $67.28 1.81 $347
93