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STOCK-BASED COMPENSATION | 12 Months Ended
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Jun. 30, 2012
STOCK-BASED COMPENSATION | NOTE 14. STOCK-BASED COMPENSATION Incentive Equity Awards. The Broadridge Financial Solutions, Inc. 2007 Omnibus Award Plan (the “2007 Plan”) provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, phantom stock awards, stock bonuses and performance compensation awards to employees, non-employee directors, and other key individuals who perform services for the Company. The Company accounts for stock-based compensation in accordance with ASC No. 718 which requires the measurement of stock-based compensation expense to be recognized in Net earnings based on the fair value of the award on the date of grant. In accordance with the 2007 Plan, the Company’s stock-based compensation consists of the following: Stock Options: Stock options are granted to employees at exercise prices equal to the fair market value of the Company’s common stock on the dates of grant. Stock options are generally issued under a graded vesting schedule, generally vest ratably over five years and have a term of 10 years. Compensation expense for stock options is recognized over the requisite service period for each separately vesting portion of the stock option award. Time-based Restricted Stock: The Company has a time-based restricted stock program under which shares of common stock have been issued to certain key employees. These shares are restricted as to transfer and in certain circumstances must be returned to the Company at the original purchase price. The Company records stock compensation expense relating to the issuance of time-based restricted stock over the period during which the transfer restrictions exist, which is up to five years from the date of grant. The value of the Company’s time-based restricted stock, based on market prices, is recognized as compensation expense over the restriction period on a straight-line basis. There are no shares of time-based restricted stock outstanding at June 30, 2012. Performance-based Restricted Stock: The Company has a performance-based restricted stock program under which shares of common stock will be issued to certain key employees upon the achievement, by the Company, of specific performance metrics. When it is probable that the performance metrics will be achieved, the Company records stock compensation expense for performance-based restricted stock on a straight-line basis over the performance period, plus a subsequent vesting period, which typically totals approximately two and one-half years from the date of grant. Certain performance-based equity awards granted to non-U.S. employees are to be settled in cash. The Company records a liability for these performance-based equity awards. The liability and the corresponding stock compensation expense are adjusted to reflect the Company’s closing stock price as of the end of each reporting period. There are no shares of performance-based restricted stock outstanding at June 30, 2012. Time-based Restricted Stock Units: The Company has a time-based restricted stock unit (“RSU”) program under which RSUs representing the right to receive one share of the Company’s common stock for each vested RSU are granted. Time-based RSUs typically vest two and one-half years from the date of grant. The Company records stock compensation expense for time-based RSUs on a straight-line basis over the vesting period. Performance-based Restricted Stock Units: The Company has a performance-based RSU program under which RSUs representing the right to receive one share of the Company’s common stock for each vested RSU are granted. RSUs vest upon the achievement, by the Company, of specific performance metrics. The Company records stock compensation expense for performance-based RSUs on a straight-line basis over the performance period, plus a subsequent vesting period, which typically totals approximately two and one-half years from the date of grant. The activity related to the Company’s incentive equity awards for the fiscal years ended June 30, 2012, 2011 and 2010 consisted of the following:
|  | Stock Options |  |  | Time-based RSUs |  |  | Performance-based RSUs |
|  | Number of Options |  |  | Weighted Average Exercise Price |  |  | Number of Shares |  |  | Weighted Average Grant-Date Fair Value |  |  | Number of Shares |  |  | Weighted Average Grant-Date Fair Value |
Balances at July 1, 2009 |  |  | 18,659,152 |  |  | $ | 18.86 |  |  |  | 1,958,112 |  |  | $ | 16.35 |  |  |  | 533,400 |  |  | $ | 15.72 |
Granted |  |  | 1,751,500 |  |  |  | 22.94 |  |  |  | 1,005,598 |  |  |  | 18.65 |  |  |  | 407,043 |  |  |  | 18.64 |
Exercised(a) |  |  | (2,905,972 | ) |  |  | 18.46 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Vesting of RSUs(b) |  |  | — |  |  |  | — |  |  |  | (982,805 | ) |  |  | 17.88 |  |  |  | (266,634 | ) |  |  | 18.34 |
Expired/forfeited |  |  | (135,468 | ) |  |  | 19.93 |  |  |  | (96,735 | ) |  |  | 21.51 |  |  |  | (2,950 | ) |  |  | 16.27 |
Balances at June 30, 2010 |  |  | 17,369,212 |  |  | $ | 19.33 |  |  |  | 1,884,170 |  |  | $ | 16.52 |  |  |  | 670,859 |  |  | $ | 16.45 |
Granted |  |  | 284,150 |  |  |  | 22.53 |  |  |  | 1,044,004 |  |  |  | 21.59 |  |  |  | 359,253 |  |  |  | 21.64 |
Exercised(a) |  |  | (2,488,648 | ) |  |  | 19.22 |  |  |  | — |  |  |  |  |  |  |  | — |  |  |  | — |
Vesting of RSUs(b) |  |  | — |  |  |  | — |  |  |  | (901,654 | ) |  |  | 14.22 |  |  |  | (321,388 | ) |  |  | 14.03 |
Expired/forfeited |  |  | (1,389,988 | ) |  |  | 24.05 |  |  |  | (94,517 | ) |  |  | 19.40 |  |  |  | — |  |  |  | — |
Balances at June 30, 2011 |  |  | 13,774,726 |  |  | $ | 18.94 |  |  |  | 1,932,003 |  |  | $ | 20.19 |  |  |  | 708,724 |  |  | $ | 20.18 |
Granted |  |  | 1,057,538 |  |  |  | 24.01 |  |  |  | 1,142,616 |  |  |  | 18.37 |  |  |  | 342,628 |  |  |  | 17.61 |
Exercised(a) |  |  | (2,151,613 | ) |  |  | 18.52 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Vesting of RSUs(b) |  |  | — |  |  |  | — |  |  |  | (887,892 | ) |  |  | 18.68 |  |  |  | (279,028 | ) |  |  | 18.68 |
Expired/forfeited |  |  | (299,163 | ) |  |  | 20.03 |  |  |  | (161,158 | ) |  |  | 19.91 |  |  |  | (69,129 | ) |  |  | 18.73 |
Balances at June 30, 2012(c) |  |  | 12,381,488 |  |  | $ | 19.42 |  |  |  | 2,025,569 |  |  | $ | 19.61 |  |  |  | 703,195 |  |  | $ | 20.39 |
(a) | Stock options exercised during the fiscal years ended June 30, 2012, 2011 and 2010 had intrinsic values of $9.7 million, $8.7 million and $10.1 million, respectively.
(b) | Time-based restricted stock units that vested during the fiscal years ended June 30, 2012, 2011 and 2010 had a total fair value of $20.9 million, $20.6 million and $20.8 million, respectively. Performance-based restricted stock units that vested during the fiscal years ended June 30, 2012, 2011 and 2010 had a total fair value of $6.7 million, $7.4 million and $5.7 million, respectively.
(c) | As of June 30, 2012, the Company’s outstanding “in the money” stock options using the fiscal year-end share price of $21.27 (approximately 8.3 million shares) had an aggregate intrinsic value of $30.3 million. As of June 30, 2012, time-based restricted stock units and performance-based restricted stock units expected to vest using the fiscal year-end share price of $21.27 (approximately 2.0 million and 0.6 million shares, respectively) had an aggregate intrinsic value of $42.2 million and $12.1 million, respectively.
The tables below summarizes information regarding the Company’s outstanding and exercisable stock options as of June 30, 2012:
|  | Outstanding Options |
|  | Options Outstanding |  |  | Weighted Average Remaining Contractual Life |  |  | Weighted Average Exercise Price |
Range of Exercise Prices |  |  |
$0.01 to $14.00 |  |  | 760,756 |  |  |  | 4.13 |  |  | $ | 13.80 |
$14.01 to $16.00 |  |  | 1,318,713 |  |  |  | 2.87 |  |  | $ | 15.71 |
$16.01 to $18.00 |  |  | 2,090,179 |  |  |  | 3.19 |  |  | $ | 17.34 |
$18.01 to $20.00 |  |  | 3,488,451 |  |  |  | 3.94 |  |  | $ | 18.76 |
$20.01 to $22.00 |  |  | 2,051,082 |  |  |  | 6.79 |  |  | $ | 21.42 |
$22.01 to $24.00 |  |  | 1,318,420 |  |  |  | 6.84 |  |  | $ | 22.93 |
$24.01 to $26.00 |  |  | 1,353,887 |  |  |  | 9.05 |  |  | $ | 24.65 |
|  |  | 12,381,488 |  |  |  | 5.05 |  |  | $ | 19.42 |
|  | Exercisable Options |
Range of Exercise Prices |  | Options Exercisable |  |  | Weighted Average Remaining Contractual Life |  |  | Weighted Average Exercise Price |
$0.01 to $14.00 |  |  | 733,356 |  |  |  | 4.04 |  |  | $ | 13.80 |
$14.01 to $16.00 |  |  | 1,318,713 |  |  |  | 2.87 |  |  | $ | 15.71 |
$16.01 to $18.00 |  |  | 2,065,379 |  |  |  | 3.15 |  |  | $ | 17.34 |
$18.01 to $20.00 |  |  | 3,438,211 |  |  |  | 3.92 |  |  | $ | 18.76 |
$20.01 to $22.00 |  |  | 1,633,777 |  |  |  | 6.65 |  |  | $ | 21.35 |
$22.01 to $24.00 |  |  | 1,026,262 |  |  |  | 6.46 |  |  | $ | 22.95 |
$24.01 to $26.00 |  |  | 255,549 |  |  |  | 7.61 |  |  | $ | 25.67 |
|  |  | 10,471,247 |  |  |  | 4.41 |  |  | $ | 18.73 |
Stock-based compensation expense of $28.3 million, $30.0 million, and $27.3 million was recognized in earnings from continuing operations in the Consolidated Statements of Earnings for the fiscal years ended June 30, 2012, 2011 and 2010, respectively, as well as related tax benefits of $10.4 million, $11.3 million, and $10.4 million, respectively. As of June 30, 2012, the total remaining unrecognized compensation cost related to non-vested stock options and RSU awards amounted to $5.1 million and $25.9 million, respectively, which will be amortized over the weighted-average remaining requisite service periods of 3.2 years and 1.5 years, respectively. The following table presents the assumptions used to determine the fair values of the stock option grants using the Binomial options pricing model during the fiscal years ended June 30, 2012, 2011 and 2010:
|  | Fiscal Year Ended June 30, 2012 |  |  | Fiscal Year Ended June 30, 2011 |  |  | Fiscal Year Ended June 30, 2010 |
Risk-free interest rate |  |  | 1.4% |  |  |  | 3.1% |  |  |  | 2.9% - 3.2% |
Dividend yield |  |  | 2.6% |  |  |  | 2.7% |  |  |  | 2.5% - 2.6% |
Weighted-average volatility factor |  |  | 28.1% |  |  |  | 31.4% |  |  |  | 32.1% - 33.0% |
Weighted-average expected life (in years) |  |  | 6.6 |  |  |  | 7.1 |  |  |  | 6.1 - 6.9 |
Weighted-average fair value (in dollars) |  |  | $ 5.01 |  |  |  | $ 6.07 |  |  |  | $ 6.00 |

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 93-6 -Paragraph 53 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 123R -Paragraph 64, 65, A240 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
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