NOTE 13-STOCK PROGRAMS

As of June 30, 2006, the Company has three active equity compensation plans which include the Amended and Restated Fiscal 2002 Share Incentive Plan, the Fiscal 1999 Share Incentive Plan and the Non-Employee Director Share Incentive Plan (collectively, the "Plans"). These Plans currently provide for the issuance of 32,894,400 shares, which consist of shares originally provided for and shares transferred to the Plans from a previous plan and employment agreement, 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, 2006, approximately 10,726,700 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 stock compensation awards outstanding at June 30, 2006 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 2006 was $35.7 million ($23.4 million after tax, or $.11 for both basic and diluted net earnings per common share). As of June 30, 2006, the total unrecognized compensation cost related to nonvested stock-based awards was $26.3 million and the related weighted-average period over which it is expected to be recognized is approximately 2.2 years.

Prior to the Company's adoption of SFAS No. 123(R), SFAS No. 123 required that the Company provide pro forma information regarding net earnings and net earnings per common share as if compensation cost for the Company's stock-based awards had been determined in accordance with the fair value method prescribed therein. The Company had previously adopted the disclosure portion of SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure," requiring quarterly SFAS No. 123 pro forma disclosure. The pro forma charge for compensation cost related to stock-based awards granted was recognized over the service period. For stock options, the service period represents the period of time between the date of grant and the date each option becomes exercisable without consideration of acceleration provisions (e.g., retirement, change of control, etc.).

The following table illustrates the effect on net earnings per common share as if the fair value method had been applied to all outstanding awards for fiscal 2005 and 2004:

YEAR ENDED JUNE 30 2005 2004(i)
(In millions, except per share data)
Net earnings, as reported       $ 406.1       $ 342.1
Deduct: Total stock-based compensation expense determined under
                fair value method for all awards, net of related tax effects 21.8 31.4
Pro forma net earnings $ 384.3 $ 310.7
Earnings per common share:
Net earnings per common share-Basic, as reported $ 1.80 $ 1.50
Net earnings per common share-Basic, pro forma $ 1.71 $ 1.36
Net earnings per common share-Diluted, as reported $ 1.78 $ 1.48
Net earnings per common share-Diluted, pro forma $ 1.67 $ 1.34

(i) Fiscal 2004 pro forma compensation cost includes the acceleration of exercisability of options held by an executive who retired on June 30, 2004 based on the original terms of the option grants.

Stock Options
A summary of the Company's stock option programs as of June 30, 2006 and changes during the fiscal year then ended is presented below:

Shares   Weighted-Average  
Exercise Price		 Aggregate
  Intrinsic Value(1)  
(in millions)		 Weighted-Average
Contractual Life
  Remaining in Years  
(Shares in thousands)
Outstanding at June 30, 2005       27,344.7             $ 38.42            
      Granted at fair value 1,880.6 35.54            
      Exercised (2,669.0 ) 25.21            
      Expired (203.3 ) 42.38            
      Forfeited (137.3 ) 37.97            
Outstanding at June 30, 2006 26,215.7 39.53                         $ 85.1             4.8
Exercisable at June 30, 2006 22,095.5 39.75                         $ 76.2             4.2

(1) The intrinsic value of a stock option is the amount by which the current market value of the underlying stock exceeds the exercise price of the option.

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 per-share weighted-average grant date fair value of stock options granted during fiscal 2006, 2005 and 2004 was $11.87, $16.45 and $13.07, respectively. The total intrinsic value of stock options exercised during fiscal 2006, 2005 and 2004 was $38.0 million, $73.2 million and $153.8 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:

YEAR ENDED JUNE 30 2006 2005 2004
Weighted-average expected stock-price volatility 23% 32% 31%
Weighted-average expected option life 8 years 7 years 7 years
Average risk-free interest rate 4.3% 3.9% 3.7%
Average dividend yield .9% .7% .6%

In addition to awards made by the Company, stock options were assumed as part of the October 1997 acquisition of the companies that sold jane brand products. There were 4,100 options to acquire shares of the Company's Class A Common Stock outstanding and exercisable as of June 30, 2006 that will expire in October 2007.

Performance Share Units
During fiscal 2006, the Company issued 111,100 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, 2008. Settlement will be made pursuant to a range of opportunities relative to the net sales and earnings per share targets of the Company. 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 $35.00 per share representing 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. The compensation cost of the PSUs is subject to adjustment based upon the attainability of the target goals.

The following is a summary of the status of the Company's PSUs as of June 30, 2006 and activity during the fiscal year then ended:

Shares Weighted-Average
  Grant Date Fair Value  
(Shares in thousands)
Nonvested at June 30, 2005       -             $ -            
    Granted 111.1 35.00            
    Vested - -            
    Forfeited - -            
Nonvested at June 30, 2006 111.1 $ 35.00            

Restricted Stock Units
The Company issued 111,100 RSUs during fiscal 2006. RSUs vest in one-third increments on or about October 31, 2006, 2007 and 2008, subject to the continued employment of the grantee. RSUs are accompanied by dividend equivalent rights that will be payable in cash upon settlement of the RSU. These awards are subject to the provisions of the agreement under which the RSUs are granted. The RSUs were valued at $35.00 per share representing the closing market value of the Company's Class A Common Stock on the date of grant.

The following is a summary of the status of the Company's RSUs as of June 30, 2006 and activity during the fiscal year then ended:

Shares Weighted-Average
  Grant Date Fair Value  
(Shares in thousands)
Nonvested at June 30, 2005       -             $ -            
    Granted 111.1 35.00            
    Vested - -            
    Forfeited - -            
Nonvested at June 30, 2006 111.1 $ 35.00            

Share Units
Certain non-employee directors defer cash compensation in the form of share units which are granted under the Non-Employee Director Share Incentive Plan and will be converted 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, 2006 and activity during the fiscal year then ended:

Shares Weighted-Average
  Grant Date Fair Value  
(Shares in thousands)
Outstanding at June 30, 2005       7.7             $ 39.13            
    Granted 5.2 33.45            
    Dividend equivalents 0.2 33.40            
    Converted - -            
Outstanding at June 30, 2006 13.1 $ 36.79            

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 $0.5 million, $0.1 million and $0.7 million as compensation expense to reflect additional deferrals and the change in the market value for fiscal 2006, 2005 and 2004, respectively.

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