Stock Incentive Plans

12 Months Ended

Jun. 30, 2019

Share-based Payment Arrangement [Abstract]

The Company's 2016 Omnibus Stock Incentive Plan provides for the granting of share-based incentive awards in the form of nonqualified stock options, stock appreciation rights ("SARs"), restricted stock units ("RSUs") and restricted and unrestricted stock to officers and key employees of the Company. The aggregate number of shares authorized for issuance under the 2016 Omnibus Stock Incentive Plan is 16 million. At June 30, 2019, 8.7 million common shares were available for future issuance.

The Company satisfies share-based incentive award obligations by issuing shares of common stock out of treasury, which have been repurchased pursuant to the Company's share repurchase program described in Note 12, or through the issuance of previously unissued common stock.

SARs - Upon exercise, SARs entitle the participant to receive shares of common stock equal to the increase in value of the award between the grant date and the exercise date. SARs are exercisable from one to three years after the date of grant and expire no more than 10 years after grant.

The fair value of each SAR award granted in 2019, 2018 and 2017 was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:



	2019			2018			2017
Risk-free interest rate	2.8		%	1.9		%	1.4		%
Expected life of award	5.1 years			5.2 years			5.3 years
Expected dividend yield of stock	1.9		%	2.0		%	2.0		%
Expected volatility of stock	24.2		%	23.4		%	28.5		%
Weighted-average fair value	$	35.09		$	29.71		$	27.39

The risk-free interest rate was based on U.S. Treasury yields with a term similar to the expected life of the award. The expected life of the award was derived by referring to actual exercise and post-vesting employment termination experience. The expected dividend yield was based on the Company's historical dividend rate and stock price over a period similar to the expected life of the award. The expected volatility of stock was derived by referring to changes in the Company's historical common stock prices over a time-frame similar to the expected life of the award.

SAR activity during 2019 is as follows (aggregate intrinsic value in millions):



	Number of Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding June 30, 2018	6,046,881		$	106.98
Granted	748,901		$	166.49
Exercised	(983,205	)	$	77.28
Canceled	(63,122	)	$	154.93
Outstanding June 30, 2019	5,749,455		$	119.29	5.8 years	$	291.6
Exercisable June 30, 2019	4,088,257		$	105.15	4.8 years	$	265.2

A summary of the status and changes of shares subject to SAR awards and the related average price per share follows:



	Number of Shares		Weighted-Average Grant Date Fair Value
Nonvested June 30, 2018	1,878,209		$	28.44
Granted	748,901		$	35.09
Vested	(905,842	)	$	28.00
Canceled	(60,070	)	$	31.15
Nonvested June 30, 2019	1,661,198		$	31.58

During 2019, 2018 and 2017, the Company recognized stock-based compensation expense of $26,568, $27,422 and $28,535, respectively, relating to SAR awards. The Company derives a tax deduction measured by the excess of the market value over the grant price at the date stock-based awards are exercised. The related income tax benefit was credited to income tax expense.

At June 30, 2019, $11,817 of expense with respect to nonvested SAR awards has yet to be recognized and will be amortized into expense over a weighted-average period of approximately 16 months. The total fair value of shares vested during 2019, 2018 and 2017 was $25,365, $26,461 and $33,094, respectively.

Information related to SAR awards exercised during 2019, 2018 and 2017 is as follows:



	2019		2018		2017
Net cash proceeds	$	2,475	$	3,682	$	2,202
Intrinsic value	95,502		136,000		153,908
Income tax benefit	15,584		28,701		31,193

Shares surrendered upon exercise of SARs: 2019 - 158,610; 2018 - 269,670; 2017 - 371,246.

RSUs - RSUs constitute an agreement to deliver shares of common stock to the participant at the end of a vesting period. Generally, the RSUs granted to employees vest and the underlying stock is issued ratably over a three-year graded vesting period. Nonvested RSUs may not be transferred and do not have dividend or voting rights. For each nonvested RSU, recipients are entitled to receive a dividend equivalent, payable in cash or common shares, equal to the cash dividend per share paid to common shareholders.

The fair value of each RSU award granted in 2019, 2018 and 2017 was based on the fair market value of the Company's common stock on the date of grant. A summary of the status and changes of shares subject to RSU awards for employees and the related average price per share follows:



	Number of Shares		Weighted-Average Grant Date Fair Value
Nonvested June 30, 2018	360,611		$	138.85
Granted	184,913		$	166.47
Vested	(156,079	)	$	131.18
Canceled	(15,365	)	$	154.22
Nonvested June 30, 2019	374,080		$	155.07

During 2019, 2018 and 2017, the Company recognized stock-based compensation expense of $25,258, $24,073 and $23,025 respectively, relating to RSU awards for employees. At June 30, 2019, $21,933 of expense with respect to nonvested RSU awards has yet to be recognized and will be amortized into expense over a weighted-average period of approximately 24 months. The total fair value of RSU awards vested during 2019, 2018 and 2017 was $20,475, $20,681 and $21,576, respectively. The Company recognized an income tax benefit of $1,548, $2,451 and $939 relating to the issuance of common stock for RSU awards that vested during 2019, 2018 and 2017, respectively.

During 2019, 2018 and 2017, 8,047, 9,900 and 12,430 RSU awards, respectively, with a one-year vesting period were granted to non-employee members of the Board of Directors. Although nonvested shares do not have dividend or voting rights, recipients receive a dividend equivalent payable in common shares, equal to the cash dividend per share paid to common shareholders. In 2019, 2018 and 2017, the Company recognized stock-based compensation expense of $1,345, $1,697, and $1,560, respectively, relating to these awards. At June 30, 2019, $414 of expense with respect to 8,003 nonvested RSU awards granted to the Board of Directors has yet to be recognized and will be amortized into expense over a weighted-average period of approximately four months. During 2019, 2018 and 2017 the Company recognized an income tax (cost) benefit of $(82), $270 and $105 respectively, related to the vesting of 9,889, 12,639 and $13,740 RSU awards, respectively, issued to the Board of Directors.

LTIP - The Company's Long Term Incentive Plans ("LTIP") provide for the issuance of unrestricted stock to certain officers and key employees based on the attainment of certain goals relating to the Company's revenue growth, earnings per share growth and return on invested capital during the three-year performance period.



Stock issued for LTIP	2019		2018		2017
LTIP three-year plan	2016-17-18		2015-16-17		2014-15-16
Number of shares issued	293,136		308,278		227,707
Share value on date of issuance	$	183.00	$	176.39	$	157.07
Total value	$	53,644	$	54,377	$	35,766

Under the Company's 2017-18-19 LTIP, a payout of unrestricted stock will be issued in April 2020.

The fair value of each LTIP award granted in 2019, 2018 and 2017 was based on the fair market value of the Company's common stock on the date of grant. Beginning January 2019, the Company changed the terms of the LTIP plan allowing newly granted LTIP awards to earn a dividend equivalent unit payable in common shares, equal to the cash dividend per share paid to common shareholders. These dividend equivalent units do not have dividend or voting rights and are subject to the same performance goals as the initial award granted. Any nonvested LTIP awards granted prior to January 2019 will continue not earning dividends or dividend equivalent units. A summary of the status and changes of shares relating to the LTIP and the related average price per share follows:



	Number of Shares		Weighted-Average Grant Date Fair Value
Nonvested June 30, 2018	658,271		$	143.90
Granted	198,737		$	157.20
Vested	(232,842	)	$	86.51
Canceled	(23,449	)	$	174.05
Nonvested June 30, 2019	600,717		$	169.36

During 2019, 2018 and 2017, the Company recorded stock-based compensation expense of $50,908, $65,640 and $27,219, respectively, relating to the LTIP. During 2019, 2018 and 2017, the Company recognized an income tax benefit of $14,101, $3,893 and $1,701, respectively, relating to the LTIP.

Shares surrendered in connection with the LTIP: 2019 - 134,169; 2018 - 139,918; 2017 - 113,074.