MAN » Topics » Stock Options

This excerpt taken from the MAN 10-Q filed Nov 2, 2006.

Stock Options

All stock-based compensation is currently granted under our 2003 Equity Incentive Plan of Manpower Inc. (“2003 Plan”). Options and stock appreciation rights are granted at a price not less than 100% of the fair market value of the common stock at the date of grant. Generally, options are granted with a vesting period of up to four years and expire ten years from date of grant. As of September 30, 2006, no stock appreciation rights had been granted or were outstanding.

We also maintain the Savings Related Share Option Scheme for United Kingdom employees with at least one year of service. The employees are offered the opportunity to obtain an option for a specified number of shares of common stock at not less than 85% of its market value on the day prior to the offer to participate in the plan. Options vest after either three, five or seven years, but may lapse earlier. Funds used to purchase the shares are accumulated through specified payroll deductions over a 60-month period.

 

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A summary of stock option activity during the nine months ended September 30, 2006 is as follows:

 

    

Shares

(in thousands)

  

Wtd. Avg.

Exercise

Price Per
Share

  

Wtd. Avg.

Remaining
Contractual
Term (years)

  

Aggregate

Intrinsic

Value

Outstanding, January 1, 2006

   5,421    $ 36.2      

Granted

   1,009      52.0      

Exercised

   1,244      32.8       $ 30.1

Forfeited or expired

   205      39.8      
                 

Outstanding, September 30, 2006

   4,981    $ 40.2    7.0    $ 105.0
                       

Exercisable, September 30, 2006

   2,336    $ 34.2    5.6    $ 63.2
                       

We have recognized expenses of $3.3 and $10.1 related to stock options for the three and nine months ended September 30, 2006, respectively. The total fair value of options vested during the same periods was $0.3 and $15.5, respectively. As of September 30, 2006, total unrecognized compensation cost was approximately $27.2, net of estimated forfeitures, which we expect to recognize over a weighted-average period of approximately 2.0 years.

We estimated the fair value of each stock option on the date of grant using the Black-Scholes pricing model and the following assumptions:

 

    

9 Months Ended

September 30,

 
     2006     2005  

Average risk-free interest rate

   4.7 %   3.8 %

Expected dividend yield

   1.1 %   0.9 %

Expected volatility

   30.0 %   30.0 %

Expected term (years)

   5.0     4.7  

The average risk-free interest rate is based on the five-year U.S. Treasury security rate in effect as of the grant date. The expected dividend yield is based on the expected annual dividend as a percentage of the market value of our common stock as of the grant date. We determined expected volatility using a weighted average of daily historical volatility (weighted 40 percent) of our stock price over the past five years and implied volatility (weighted 60 percent) based upon exchange traded options for our common stock. We believe that a blend of historical volatility and implied volatility better reflects future market conditions and better indicates expected volatility than considering purely historical volatility. We determined the expected term of the stock options using historical data. The weighted-average fair value of options granted was $16.26 and $12.92 for the nine months ended September 30, 2006 and 2005, respectively.

This excerpt taken from the MAN 10-Q filed Aug 3, 2006.

Stock Options

All stock-based compensation is currently granted under our 2003 Equity Incentive Plan of Manpower Inc. (“2003 Plan”). Options and stock appreciation rights are granted at a price not less than 100% of the fair market value of the common stock at the date of grant. Generally, options are granted with a vesting period of up to four years and expire ten years from date of grant. As of June 30, 2006, no stock appreciation rights had been granted or were outstanding.

 

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We also maintain the Savings Related Share Option Scheme for United Kingdom employees with at least one year of service. The employees are offered the opportunity to obtain an option for a specified number of shares of common stock at not less than 85% of its market value on the day prior to the offer to participate in the plan. Options vest after either three, five or seven years, but may lapse earlier. Funds used to purchase the shares are accumulated through specified payroll deductions over a 60-month period.

A summary of stock option activity during the six months ended June 30, 2006 is as follows:

 

    

Shares

(in thousands)

   Wtd. Avg.
Exercise
Price Per
Share
   Wtd. Avg.
Remaining
Contractual
Term (years)
  

Aggregate

Intrinsic

Value

Outstanding, January 1, 2006

   5,421    $ 36.2      

Granted

   1,002      52.3      

Exercised

   1,102      32.7       $ 26.5

Forfeited or expired

   117      41.3      
                 

Outstanding, June 30, 2006

   5,204    $ 40.0    7.2    $ 128.2
                       

Exercisable, June 30, 2006

   2,496    $ 34.2    5.9    $ 75.9
                       

We have recognized expenses of $3.6 and $6.8 related to stock options for the three and six months ended June 30, 2006, respectively. The total fair value of options vested during the same periods was $0.5 and $15.2, respectively. As of June 30, 2006, total unrecognized compensation cost was approximately $31.4, net of estimated forfeitures, which we expect to recognize over a weighted-average period of approximately 2.5 years.

We estimated the fair value of each stock option on the date of grant using the Black-Scholes pricing model and the following assumptions:

 

     6 Months Ended
June 30,
 
     2006     2005  

Average risk-free interest rate

   4.7 %   3.8 %

Expected dividend yield

   1.1 %   0.9 %

Expected volatility

   30.0 %   30.0 %

Expected term (years)

   5.0     4.7  

The average risk-free interest rate is based on the five-year U.S. Treasury security rate in effect as of the grant date. The expected dividend yield is based on the expected annual dividend as a percentage of the market value of our common stock as of the grant date. We determined expected volatility using a weighted average of daily historical volatility (weighted 40 percent) of our stock price over the past five years and implied volatility (weighted 60 percent) based upon exchange traded options for our common stock. We believe that a blend of historical volatility and implied volatility better reflects future market conditions and better indicates expected volatility than considering purely historical volatility. We determined the expected term of the stock options using historical data. The weighted-average fair value of options granted was $16.26 and $12.92 for the six months ended June 30, 2006 and 2005, respectively.

This excerpt taken from the MAN 10-Q filed May 1, 2006.

Stock Options

All stock-based compensation is currently granted under our 2003 Equity Incentive Plan of Manpower Inc. (“2003 Plan”). Options and stock appreciation rights are granted at a price not less than 100% of the fair market value of the common stock at the date of grant. Generally options are granted with a vesting period of up to four years and expire ten years from date of grant. As of March 31, 2006, no stock appreciation rights had been granted or were outstanding.

We also have the Savings Related Share Option Scheme for United Kingdom employees with at least one year of service. The employees are offered the opportunity to obtain an option for a specified number of shares of common stock at not less than 85% of its market value on the day prior to the offer to participate in the plan. Options vest after either three, five or seven years, but may lapse earlier. Funds used to purchase the shares are accumulated through specified payroll deductions over a 60-month period.

 

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A summary of stock option activity during the three months ended March 31, 2006 is as follows:

 

    

Shares

(in thousands)

   Wtd. Avg.
Exercise
Price Per
Share
   Wtd. Avg.
Remaining
Contractual
Term (years)
  

Aggregate

Intrinsic

Value

Outstanding, January 1, 2006

   5,421    $ 36.2      

Granted

   1,002      52.3      

Exercised

   707      32.7       $ 14.2

Forfeited or expired

   73      40.3      
                 

Outstanding, March 31, 2006

   5,643    $ 39.4    7.3    $ 100.1
                       

Exercisable, March 31, 2006

   2,895    $ 33.9    6.0    $ 67.4
                       

For the quarter ended March 31, 2006 we have expensed $3.2 related to stock options. The total fair value of options vested during the quarter ended March 31, 2006 was $14.7. As of March 31, 2006, total unrecognized compensation cost was approximately $35.0, net of estimated forfeitures, which we expect to recognize over a weighted-average period of approximately 2.5 years.

We estimated the fair value of each stock option on the date of grant using the Black-Scholes pricing model and the following assumptions:

 

     3 Months Ended  
     March 31,  
     2006     2005  

Average risk-free interest rate

   4.7 %   3.8 %

Expected dividend yield

   1.1 %   0.9 %

Expected volatility

   30.0 %   30.0 %

Expected term (years)

   5.0     4.7  

The average risk-free interest rate is based on the five-year U.S. Treasury security rate in effect as of the grant date. The expected dividend yield is based on the expected annual dividend as a percentage of the market value of our common stock as of the grant date. We determined expected volatility using a weighted average of daily historical volatility (weighted 40 percent) of our stock price over the past five years and implied volatility (weighted 60 percent) based upon exchange traded options for our common stock. We believe that a blend of historical volatility and implied volatility better reflects future market conditions and better indicates expected volatility than considering purely historical volatility. We determined the expected term of the stock options using historical data.

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