Stock Option Plans

12 Months Ended

Jul. 31, 2011

Stock Option Plans

Stock Option Plans

NOTE I
Stock Option Plans

          Employee Incentive Plans In November 2010 shareholders approved the 2010 Master Stock Incentive Plan (the "Plan") that replaced the 2001 Plan that was scheduled to expire on December 31, 2010 and provided for similar awards. The Plan extends through September 2020 and allows for the granting of nonqualified stock options, incentive stock options, restricted stock, restricted stock units, stock appreciation rights ("SAR"), dividend equivalents, and other stock-based awards. Options under the Plan are granted to key employees at market price at the date of grant. Options are exercisable for up to 10 years from the date of grant. The Plan also allows for the granting of performance awards to a limited number of key executives. As administered by the Human Resources Committee of the Company's Board of Directors, these performance awards are payable in common stock and are based on a formula which measures performance of the Company over a three-year period. Performance award expense under these plans totaled $1.8 million in Fiscal 2011 and $0.5 million in Fiscal 2010. The Company recorded a net reversal of performance award expense in Fiscal 2009 of $3.1 million due to the reversal of $3.6 million of Long-Term Compensation Plan expense recognized in prior periods based upon actual and forecasted results.

          Stock options issued from Fiscal 2001 to Fiscal 2011 become exercisable for non-executives in equal increments over three years. Stock options issued in Fiscal 2011 become exercisable for executives in equal increments over three years. Stock options issued from Fiscal 2001 to Fiscal 2010 became exercisable for most executives immediately upon the date of grant. Certain other stock options issued to executives during Fiscal 2004, 2006 and 2007 became exercisable in equal increments over three years. For Fiscal 2011, the Company recorded pretax compensation expense associated with stock options of $6.5 million and recorded $2.4 million of related tax benefit.  For Fiscal 2010 and 2009, the Company recorded pretax compensation expense associated with stock options of $6.9 million and $4.1 million, respectively, and $2.5 million and $1.5 million, respectively, of related tax benefit.

          Stock-based employee compensation cost is recognized using the fair-value based method. The Company determined the fair value of these awards using the Black-Scholes option pricing model, with the following weighted average assumptions:

	2011			2010			2009
Risk - free interest rate		<0.12 - 3.1	%		< 0.01 - 3.9	%		1.4- 4.0	%
Expected volatility		25.5- 34.7	%		24.4- 32.3	%		21.6- 25.5	%
Expected dividend yield		1.0	%		1.0	%		1.0	%
Expected life
Director original grants without reloads		8 years			8 years			8 years
Non - officer original grants		8 years			7- 8 years			7 years
Officer original grants with reloads		—			4 years			4 years
Reload grants		<8 years			<8 years			<5 years
Officer original grants without reloads		8 years			8 years			7 years

          Reload grants are grants made to officers or directors who exercised a reloadable option during the fiscal year and made payment of the purchase price using shares of previously owned Company stock. The reload grant is for the number of shares equal to the shares used in payment of the purchase price and/or withheld for minimum tax withholding.  Beginning in Fiscal 2011 options no longer have a reload provision for officers and directors.

          Black-Scholes is a widely accepted stock option pricing model; however, the ultimate value of stock options granted will be determined by the actual lives of options granted and the actual future price levels of the Company's common stock. The weighted average fair value for options granted during Fiscal 2011, 2010, and 2009 is $17.26, $13.23, and $8.56 per share, respectively, using the Black-Scholes pricing model.

          The following table summarizes stock option activity:

	Options Outstanding			Weighted Average Exercise Price
Outstanding at July 31, 2008		5,181,778		$	25.62
Granted		366,588			34.23
Exercised		(505,363	)		17.64
Canceled		(44,878	)		39.04
Outstanding at July 31, 2009		4,998,125			26.94
Granted		643,974			42.41
Exercised		(848,990	)		20.84
Canceled		(21,297	)		41.94
Outstanding at July 31, 2010		4,771,812			30.04
Granted		551,601			57.22
Exercised		(1,121,751	)		23.10
Canceled		(7,665	)		47.20
Outstanding at July 31, 2011		4,193,997			35.44

          The total intrinsic value of options exercised during Fiscal 2011, 2010 and 2009 was $34.2 million, $19.5 million, and $9.1 million, respectively.

          Shares reserved at July 31, 2011 for outstanding options and future grants were 8,307,431. Shares reserved consist of shares available for grant plus all outstanding options. Upon shareholder approval of the 2010 Master Stock Incentive Plan, 4,600,000 shares were added to shares reserved. Remaining shares available for grant under the 2001 plan were removed from the shares reserved calculation.

          The following table summarizes information concerning outstanding and exercisable options as of July 31, 2011:

Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$12 to $22		658,066		1.19	$	17.89		658,066	$	17.89
$22 to $32		1,102,423		2.94		30.12		1,086,511		30.09
$32 to $42		1,121,686		5.67		34.95		1,101,164		34.96
$42 and above		1,311,822		8.23		49.15		655,381		44.34
		4,193,997		5.05		35.44		3,501,122		32.00

          At July 31, 2011, the aggregate intrinsic value of shares outstanding and exercisable was $85.0 million and $81.9 million, respectively.

          The following table summarizes the status of options which contain vesting provisions:

	Options			Weighted Average Grant Date Fair Value
Non - vested at July 31, 2010		407,453		$	12.89
Granted		482,250			18.45
Vested		(189,913	)		12.27
Canceled		(6,915	)		15.42
Non - vested at July 31, 2011		692,875			16.90

          The total fair value of shares vested during Fiscal 2011, 2010, and 2009 was $10.5 million, $8.0 million, and $7.9 million, respectively.

          As of July 31, 2011, there was $6.1 million of total unrecognized compensation cost related to non-vested stock options granted under the Plan. This unvested cost is expected to be recognized during Fiscal 2012, Fiscal 2013, and Fiscal 2014.