NOTE 15 – COMMON STOCK

Stock Repurchase Programs

On October 16, 2008, the board authorized an expenditure of $350,000 to repurchase shares. Under this program, the Company’s shares may be purchased over time, as market and business conditions warrant. There is no time restriction on these authorizations. Total repurchases in fiscal year 2011 were 2,867 shares at an aggregate cost of $149,907, with an average price per share of $52.29. The aggregate cost of repurchases in fiscal years 2010 and 2009 was $99,999 (2,720 shares at an average price per share of $36.76) and $96,439 (3,347 shares at an average price per share of $28.81), respectively. As of July 31, 2011, $203,037 remains to be expended under the current board repurchase authorizations. Repurchased shares are held in treasury for use in connection with the Company’s stock plans and for general corporate purposes.

Stock Plans

The Company currently has four stock-based employee and director compensation award types (Stock Option, Restricted Stock Unit (“RSU”), Management Stock Purchase Plan (“MSPP”) and the Employee Stock Purchase Plan (“ESPP”)), which are described more fully below under the captions Stock Purchase Plans and Stock Option and Restricted Stock Unit Plans. The detailed components of stock-based compensation expense recorded in the consolidated statements of earnings for the years ended July 31, 2011, July 31, 2010 and July 31, 2009 are illustrated in the table below.

	July 31, 2011		July 31, 2010		July 31, 2009
Restricted stock units	$	12,651	$	11,314	$	10,136
Stock options		5,298		4,849		4,627
Employee stock purchase plan (“ESPP”)		4,527		4,488		4,939
Management stock purchase plan (“MSPP”)		3,957		3,965		3,782
Total	$	26,433	$	24,616	$	23,484

The following table illustrates the income tax effects related to stock-based compensation for the fiscal years:

	2011		2010		2009
Excess tax benefits in cash flows from
financing activities	$	12,777	$	2,671	$	457
Tax benefit recognized related to
total stock-based compensation expense		8,457		7,159		6,288
Actual tax benefit realized for tax deductions
from option exercises of stock-based
payment arrangements		23,074		8,301		3,949

The following weighted average assumptions were used in estimating the fair value of stock options and ESPP shares granted during the fiscal years using a Black-Scholes-Merton option pricing formula:

	2011			2010			2009
Stock Options
Weighted average fair value at
grant date	$	15.78		$	10.44		$	6.79
Valuation assumptions:
Expected dividend yield		1.9	%		2.0	%		1.8	%
Expected volatility		36.8	%		35.2	%		31.9	%
Expected life (years)		5			5			5
Risk-free interest rate		1.8	%		2.2	%		1.8	%

	2011			2010			2009
ESPP Shares
Weighted average fair value at
grant date	$	11.66		$	8.28		$	7.99
Valuation assumptions:
Expected dividend yield		1.5	%		1.9	%		1.9	%
Expected volatility		31.4	%		31.3	%		56.1	%
Expected life (years)	½ year			½ year			½ year
Risk-free interest rate		0.1	%		0.2	%		0.7	%

The Company has placed exclusive reliance on historical volatility in its estimate of expected volatility. The Company used a sequential period of historical data equal to the expected term (or expected life) of the options and ESPP shares granted using a simple average calculation based upon the daily closing prices of the aforementioned period.

The expected life (years) represents the period of time for which the options and ESPP shares granted are expected to be outstanding. This estimate was derived from historical share option exercise experience, which management believes provides the best estimate of the expected term.

The following paragraphs describe each of the aforementioned stock-based compensation plans in detail:

Stock Purchase Plans

During fiscal year 2000, the Company’s shareholders approved two stock purchase plans, the MSPP and the ESPP. Participation in the MSPP is limited to certain executives as approved by the compensation committee of the board of directors, which also established common stock ownership targets for participants. Participation in the ESPP is available to substantially all employees that are not included in the MSPP.

The purpose of the MSPP is to encourage key employees of the Company to increase their ownership of shares of the Company’s common stock by providing such employees with an opportunity to elect to have portions of their total annual compensation paid in the form of restricted units, to make cash purchases of restricted units and to earn additional matching restricted units which cliff vest after four years. Such restricted units aggregated 973 and 1,014 as of July 31, 2011 and July 31, 2010, respectively. As of July 31, 2011, there was $6,394 of total unrecognized compensation cost related to nonvested restricted stock units granted under the MSPP, which is expected to be recognized over a weighted-average period of 2.5 years.

The following is a summary of MSPP activity during the fiscal years:

	2011		2010		2009
Deferred compensation and cash
contributions	$	4,351	$	3,232	$	5,382
Fair value of restricted stock units vested	$	4,095	$	3,853	$	1,757
Vested units distributed		176		200		158

The ESPP enables participants to purchase shares of the Company’s common stock through payroll deductions at a price equal to 85% of the lower of the market price at the beginning or end of each semi-annual stock purchase period. The semi-annual offering periods end in April and October. For the years ended July 31, 2011, July 31, 2010 and July 31, 2009, the Company issued 512, 619 and 567 shares at an average price of $35.09, $24.59 and $22.28, respectively.

Both plans provide for accelerated vesting if there is a change in control (as defined in the plans). All of the above shares were issued from treasury stock.

Stock Option and Restricted Stock Unit Plans

The Company has adopted several plans that provide for the granting of stock options to employees and non-employee directors at option prices equal to the market price of the common stock at the date of grant. On November 17, 2004, the Company’s shareholders approved the 2005 Stock Plan. As a result of such approval, the compensation committee of the board of directors (a) amended the 2001 Stock Option Plan for non-employee directors to reduce the total number of shares remaining available for grants from 261 to 150, and (b) terminated all other stock plans, except that options then outstanding thereunder remained in effect in accordance with their terms. Up to 8,700 shares are issuable under the 2005 Stock Plan. Both plans provide for accelerated vesting if there is a change in control (as defined in the plans). The 2005 Stock Plan permits the Company to grant to its employees and non-employee directors other forms of equity compensation in addition to stock options (that is, restricted shares, restricted units, performance shares and performance units).

The fair value of the restricted unit awards are determined by reference to the closing price of the stock on the date of the award, and are charged to earnings over the service periods during which the awards are deemed to be earned; four years, in the case of units awarded to employees and upon grant, in the case of the annual award units to non-employee directors. The annual award units granted to non-employee directors of the Company (and any related dividends paid in the form of additional units) are converted to shares once the director ceases to be a member of the board of directors. A total of 25 and 34 annual award units were granted during the years ended July 31, 2011 and July 31, 2010, respectively, with weighted-average fair market values of $49.81 and $36.69 per share, respectively. Restricted stock units granted to employees cliff-vest after the fourth anniversary of the date of grant. Dividends on unvested restricted stock units vest at the same time as the restricted units for which the dividends were recorded and are forfeitable if the participant does not vest in the original award.

A summary of restricted stock unit activity, excluding annual award units, for the 2005 Stock Plan during the year ended July 31, 2011, is presented below:

			Weighted-
			Average
			Grant-Date
	Shares		Fair Value
Nonvested at August 1, 2010	1,232		$	35.38
Granted	235			55.31
Vested	(191	)		44.10
Forfeited	(57	)		34.01
Nonvested at July 31, 2011	1,219		$	37.92

As of July 31, 2011 there was $27,075 of total unrecognized compensation cost related to nonvested restricted stock units granted under the 2005 Stock Plan, which is expected to be recognized over a weighted-average period of 2.9 years.

The forms of options adopted provide that the options may not be exercised within one year from the date of grant, and expire if not completely exercised within seven years from the date of grant. Generally, in any year after the first year, the options can be exercised with respect to only up to 25% of the shares subject to the option, computed cumulatively. The Company’s shareholders have approved all of the Company’s stock plans.

A summary of option activity for all stock option plans during the year ended July 31, 2011 is presented below:

			Weighted-		Weighted-
			Average		Average	Aggregate
			Exercise		Remaining	Intrinsic
Options	Shares		Price		Contractual Term	Value
Outstanding at August 1, 2010	3,849		$	29.75
Granted	216			54.94
Exercised	(1,555	)		26.67
Forfeited or Expired	(67	)		27.31
Outstanding at July 31, 2011	2,443		$	34.01	4.0	$	39,203
Expected to vest at July 31, 2011	1,028		$	37.89	5.3	$	13,116
Exercisable at July 31, 2011	1,386		$	30.94	3.0	$	25,824

As of July 31, 2011, there was $7,833 of total unrecognized compensation cost related to nonvested stock options, which is expected to be recognized over a weighted-average period of 2.6 years. The total intrinsic value of options exercised during the years ended July 31, 2011, July 31, 2010 and July 31, 2009 was $39,583, $5,628 and $1,387, respectively. The intrinsic value is the result of multiplying shares by the amount by which the current market value of the underlying stock exceeds the exercise price of the option.

As of July 31, 2011, approximately 4,856 shares of common stock of the Company were reserved for stock-based compensation plans (approximately 2,102 shares are reserved for vested awards and approximately 2,754 shares are reserved for unvested awards). The Company currently uses treasury shares that have been repurchased through the Company’s stock repurchase program to satisfy share award exercises.