NOTE 16 - STOCK PROGRAMS
As of June 30, 2009, the Company has two active equity
compensation plans which include the Amended and
Restated Fiscal 2002 Share Incentive Plan and the Non-Employee Director Share Incentive Plan (collectively, the
"Plans"). These Plans currently provide for the issuance of
24,720,200 shares of Class A Common Stock, which consist
of shares originally provided for and shares transferred
to the Plans from other inactive plans and employment
agreements, to be granted in the form of stock-based
awards to key employees, consultants and non-employee
directors of the Company. As of June 30, 2009, approximately
5,353,100 shares of Class A Common Stock were
reserved and available to be granted pursuant to these
Plans. The Company may satisfy the obligation of its stock-based
compensation awards with either new or treasury
shares. The Company's equity compensation awards
outstanding at June 30, 2009 include stock options,
performance share units ("PSU"), restricted stock units
("RSU") and share units.
Total net stock-based compensation expense is attributable
to the granting of, and the remaining requisite
service periods of, stock options, PSUs, RSUs and share
units. Compensation expense attributable to net stock-based
compensation for fiscal 2009, 2008 and 2007 was
$51.5 million ($34.3 million after tax), $47.2 million ($31.2
million after tax) and $43.2 million ($28.3 million after
tax), respectively. As of June 30, 2009, the total unrecognized
compensation cost related to nonvested stock-based
awards was $35.4 million and the related weighted-average
period over which it is expected to be recognized
is approximately 1.8 years.
Stock Options
A summary of the Company's stock option programs as of June 30, 2009 and changes during the fiscal year then ended,
is presented below:
The exercise period for all stock options generally may not
exceed ten years from the date of grant. Stock option
grants to individuals generally become exercisable in
three substantively equal tranches over a service period of
up to four years. The Company attributes the value of
option awards on a straight-line basis over the requisite
service period for each separately vesting portion of the
award as if the award was, in substance, multiple awards.
The per-share weighted-average grant date fair value of
stock options granted during fiscal 2009, 2008 and 2007
was $17.30, $14.36 and $13.69, respectively. The total
intrinsic value of stock options exercised during fiscal
2009, 2008 and 2007 was $24.7 million, $33.2 million
and $72.3 million, respectively.
The fair value of each option grant was estimated on
the date of grant using the Black-Scholes option-pricing
model with the following assumptions:
Performance Share Units
During fiscal 2009, the Company granted 131,000 PSUs,
which will be settled in stock subject to the achievement
of the Company's net sales and net earnings per share
goals for the three years ending June 30, 2011. Settlement
will be made pursuant to a range of opportunities
relative to the net sales and diluted net earnings per
common share targets of the Company and, as such, the
compensation cost of the PSU is subject to adjustment
based upon the attainability of these target goals. No
settlement will occur for results below the applicable minimum
threshold and additional shares shall be issued if
performance exceeds the targeted performance goals.
PSUs are accompanied by dividend equivalent rights that
will be payable in cash upon settlement of the PSU. These
awards are subject to the provisions of the agreement
under which the PSUs are granted. The PSUs were valued
at the closing market value of the Company's Class A
Common Stock on the date of grant and generally vest at
the end of the performance period. Approximately 27,000
shares of the Company's Class A Common Stock are
anticipated to be issued, relative to the target goals set at
the time of issuance, in settlement of the 96,100 PSUs that
vested as of June 30, 2009. These awards will be settled in
the first quarter of fiscal 2010, subject to the approval of
the Stock Plan Subcommittee of the Company's Board
of Directors. In September 2008, 78,400 shares of the
Company's Class A Common Stock were issued and
related accrued dividends were paid, relative to the target
goals set at the time of issuance, in settlement of 96,600
PSUs which vested as of June 30, 2008.
The following is a summary of the status of the Company's
PSUs as of June 30, 2009 and activity during the
fiscal year then ended:
Restricted Stock Units
The Company granted approximately 618,500 RSUs
during fiscal 2009. At the time of grant, 344,200 were
scheduled to vest on November 2, 2009, 178,900 on
November 1, 2010 and 95,400 on October 31, 2011,
all subject to the continued employment or retirement of
the grantees. Certain RSUs granted in fiscal 2009 are
accompanied by dividend equivalent rights that will be
payable in cash upon settlement of the RSU and, as such,
were valued at the closing market value of the Company's
Class A Common Stock on the date of grant. Other RSUs
granted in fiscal 2009 are not accompanied by dividend
equivalent rights and, as such, were valued at the closing
market value of the Company's Class A Common Stock
on the date of grant less the discounted present value of
the dividends expected to be paid on the shares during
the vesting period.
The following is a summary of the status of the
Company's RSUs as of June 30, 2009 and activity during
the fiscal year then ended:
Share Units
The Company grants share units to certain non-employee
directors under the Non-Employee Director Share
Incentive Plan. The share units are convertible into shares
of Class A Common Stock as provided for in that plan.
Share units are accompanied by dividend equivalent
rights that are converted to additional share units when
such dividends are declared. The following is a summary
of the status of the Company's share units as of June 30,
2009 and activity during the fiscal year then ended:
Cash Units
Certain non-employee directors defer cash compensation
in the form of cash payout share units, which are not subject
to the Plans. These share units are classified as liabilities
and, as such, their fair value is adjusted to reflect the current
market value of the Company's Class A Common Stock.
The Company recorded $0.3 million as compensation
income and $0.5 million and $0.8 million as compensation
expense to reflect additional deferrals and the change in the
market value for fiscal 2009, 2008 and 2007, respectively.
