Accounting For Stock-Based Compensation

3 Months Ended

Oct. 31, 2013

Accounting For Stock-Based Compensation [Abstract]

Accounting For Stock-Based Compensation

Note C – Accounting for Stock-Based Compensation

Stock-based compensation expense is recognized using the fair-value method for all awards.  Most of the options granted in the first quarter of Fiscal 2014 were reload options related to options originally granted prior to 2010 which were exercised during the first quarter.  A reload stock option is granted for the number of shares tendered as payment for the exercise price and tax withholding obligation upon the exercise of a stock option with a reload provision.  The option price of the reload option is equal to the market price of the stock on the date of exercise of the original option and will expire on the same date as the original option which was exercised.  The Company determined the fair value of its option awards using the Black-Scholes option pricing model.  The following assumptions were used to value the options granted during the three months ended October 31, 2013: range of 6 years to 8 years expected life; expected volatility range of 25.3 percent to 28.0 percent; risk-free interest rate range of 2.18 percent to 2.47 percent; and annual dividend yield of 1.4 percent.  The expected life for options granted during the period represents the period of time that the options are expected to be outstanding based on the contractual life and historical data of option holder exercise and termination behavior.  Expected volatilities are based upon historical volatility of the Company’s stock over a period at least equal to the expected life of each option grant.  Option grants are priced at the fair market value of the Company’s stock on the date of grant.  The weighted average fair value for options granted during the three months ended October 31, 2013 and 2012 was $10.30 per share and $3.15 per share, respectively. For both the three months ended October 31, 2013 and 2012, the Company recorded pre-tax stock-based compensation expense associated with stock options of $1.4 million and related tax benefit of $0.4 million in each of the periods.

The following table summarizes stock option activity during the three months ended October 31, 2013:

	Options Outstanding	Weighted Average Exercise Price
Outstanding at July 31, 2013	7,329,820	$                        23.88
Granted	10,435	38.38
Exercised	(517,315)	17.70
Canceled	(3,749)	32.81
Outstanding at October 31, 2013	6,819,191	24.36

The total intrinsic value of options exercised during the three months ended October 31, 2013 and 2012 was $10.7  million and $17.0million, respectively.

The following table summarizes information concerning outstanding and exercisable options as of October 31, 2013:

Range of Exercise Prices	Number Outstanding	Weighted Average Remaining Contractual Life (Years)	Weighted Average Exercise Price	Number Exercisable	Weighted Average Exercise Price
$0.00 to $15.89	744,523	1.46	$         15.35	744,523	$          15.35
$15.90 to $20.89	1,910,574	3.53	17.43	1,910,574	17.43
$20.90 to $25.89	1,352,739	5.47	21.80	1,352,739	21.80
$25.90 to $30.89	898,184	7.11	29.15	589,545	29.16
$30.90 and above	1,913,171	8.29	34.35	415,656	34.90
	6,819,191	5.50	24.36	5,013,037	21.13

At October  31, 2013, the aggregate intrinsic value of options outstanding and exercisable was $104.0 million and $92.7 million, respectively.

   As of October 31, 2013, there was $6.2 million of total unrecognized compensation expense related to non-vested stock options granted under the 2010 Master Stock Incentive Plan. This unvested expense is expected to be recognized during the remainder of Fiscal Years 2014, 2015, and 2016.