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Stock-Based Compensation | 12 Months Ended
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Apr. 30, 2011
Stock-Based Compensation |
Stock-Based Compensation | NOTE 14: STOCK-BASED COMPENSATION We utilize the fair value method to account for stock-based awards. Stock-based compensation expense of $14.5 million, $29.4 million and $32.6 million was recorded in fiscal years 2011, 2010 and 2009, respectively, net of related tax benefits of $5.4 million, $10.5 million and $12.2 million, respectively. Stock-based compensation expense of our continuing operations totaled $14.5 million, $29.3 million and $26.6 million in fiscal years 2011, 2010 and 2009, respectively. Accounting standards require excess tax benefits from stock-based compensation to be included as a financing activity in the statements of cash flows. As a result, we classified $0.5 million, $1.6 million and $8.6 million as cash inflows from financing activities for fiscal years 2011, 2010 and 2009, respectively. We realized tax benefits of $4.4 million, $6.6 million and $20.2 million in fiscal years 2011, 2010 and 2009, respectively. We have four stock-based compensation plans which have been approved by our shareholders. As of April 30, 2011, we had 11.5 million shares reserved for future awards under stock-based compensation plans. We issue shares from our treasury stock to satisfy the exercise or release of stock-based awards. We believe we have adequate treasury stock to issue for the exercise or release of stock-based awards. Our 2003 Long-Term Executive Compensation Plan provides for awards of options (both incentive and nonqualified), nonvested shares, performance nonvested share units and other stock-based awards to employees. These awards entitle the holder to shares or the right to purchase shares of common stock as the award vests, typically over a three-year or four-year period with a portion vesting each year. Historically, nonvested shares have received dividends during the vesting period, however awards granted after October 1, 2010 will no longer receive dividends during the vesting period. Performance nonvested share units receive cumulative dividends at the end of the vesting period. We measure the fair value of options on the grant date or modification date using the Black-Scholes option valuation model. We measure the fair value of nonvested shares and performance nonvested share units based on the closing price of our common stock on the grant date. Generally, we expense the grant-date fair value, net of estimated forfeitures, over the vesting period on a straight-line basis. Awards granted to employees who are of retirement age or early retirement age (age 65 or age 55 and ten years of service) or reach either retirement age prior to the end of the service period of the awards, are expensed over the shorter of the two periods. Options are generally granted at a price equal to the fair market value of our common stock on the grant date and have a contractual term of ten years. Our 1999 Stock Option Plan for Seasonal Employees, which provided for awards of nonqualified options to certain employees, was terminated effective December 31, 2009, except for outstanding awards thereunder. These awards were granted to seasonal employees in our Tax Services segment and entitled the holder to the right to purchase shares of common stock as the award vests, typically over a two-year period. We measured the fair value of options on the grant date using the Black-Scholes option valuation model. We expensed the grant-date fair value, net of estimated forfeitures, over the seasonal service period. Options were granted at a price equal to the fair market value of our common stock on the grant date, are exercisable during September through November in each of the two years following the calendar year of the grant, and have a contractual term of 29 months. Our 1989 Stock Option Plan for Outside Directors, which provided for awards of nonqualified options to outside directors, was terminated effective June 11, 2008, except for outstanding awards thereunder. The plan was replaced by the 2008 Deferred Stock Unit Plan for Outside Directors. The number of deferred stock units credited to an outside director's account pursuant to an award is determined by dividing the dollar amount of the award by the average current market value per share of common stock for the ten consecutive trading dates ending on the date the deferred stock units are granted to the outside directors. Each deferred stock unit granted is vested upon award and the settlement of shares occurs six months after separation of service from the Board of Directors. The vested shares receive dividends prior to settlement, which are reinvested and settled in shares at the time of settlement. Our 2000 Employee Stock Purchase Plan (ESPP) provides employees the option to purchase shares of our common stock through payroll deductions. The purchase price of the stock is 90% of the lower of either the fair market value of our common stock on the first trading day within the Option Period or on the last trading day of the Option Period. The Option Periods are six-month periods beginning on January 1 and July 1 each year. We measure the fair value of options on the grant date utilizing the Black-Scholes option valuation model. The fair value of the option includes the value of the 10% discount and the look-back feature. We expense the grant-date fair value over the six-month vesting period. A summary of options for the year ended April 30, 2011, is as follows:
(in 000s, except per share amounts) |  |  |  |
|  |  |  |  |  |  |  | Weighted-Average |  |  |  |  |  |  |
|  |  |  |  | Weighted-Average |  |  | Remaining |  |  | Aggregate |  |  |  |
|  | Shares |  |  | Exercise Price |  |  | Contractual Term |  |  | Intrinsic Value |  |  |  |
Outstanding, beginning of the year |  |  | 15,082 |  |  | $ | 20.58 |  |  |  |  |  |  |  |  |  |  |  |  |
Granted |  |  | 2,080 |  |  |  | 13.29 |  |  |  |  |  |  |  |  |  |  |  |  |
Exercised |  |  | (338 | ) |  |  | 10.64 |  |  |  |  |  |  |  |  |  |  |  |  |
Forfeited or expired |  |  | (6,034 | ) |  |  | 22.17 |  |  |  |  |  |  |  |  |  |  |  |  |
Outstanding, end of the year |  |  | 10,790 |  |  | $ | 18.64 |  |  |  | 4 years |  |  | $ | 9,224 |  |  |  |  |
Exercisable, end of the year |  |  | 8,122 |  |  | $ | 19.95 |  |  |  | 2 years |  |  | $ | 1,318 |  |  |  |  |
Exercisable and expected to vest |  |  | 10,650 |  |  |  | 18.71 |  |  |  | 4 years |  |  |  | 8,666 |  |  |  |  |
The total intrinsic value of options exercised during fiscal years 2011, 2010 and 2009 was $1.8 million, $5.4 million and $33.0 million, respectively. As of April 30, 2011, we had $3.2 million of total unrecognized compensation cost related to these options. The cost is expected to be recognized over a weighted-average period of two years. We utilize the Black-Scholes option valuation model to value our options on the grant date. We typically estimate the expected volatility using our historical stock price data, unless historical volatility is not representative of expected volatility. We also use historical exercise and forfeiture behaviors to estimate the options expected term and our forfeiture rate. The dividend yield is calculated based on the current dividend and the market price of our common stock on the grant date. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve in effect on the grant date. Both expected volatility and the risk-free interest rate are based on a period that approximates the expected term. The following assumptions were used to value options during the periods:
Year Ended April 30, |  | 2011 |  |  | 2010 |  |  | 2009 |  |  |  |
Options – management and director: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Expected volatility |  |  | 28.98% - 30.20% |  |  |  | 27.11% - 27.27% |  |  |  | 23.41% - 25.20% |  |  |  |  |
Expected term |  |  | 5 years |  |  |  | 5 years |  |  |  | 4years |  |  |  |  |
Dividend yield |  |  | 4.18% - 5.17% |  |  |  | 3.24% - 3.55% |  |  |  | 2.35% - 3.04% |  |  |  |  |
Risk-free interest rate |  |  | 1.26% - 1.92% |  |  |  | 2.38% - 2.75% |  |  |  | 2.54% - 3.26% |  |  |  |  |
Weighted-average fair value |  | $ | 2.25 |  |  | $ | 3.27 |  |  | $ | 3.80 |  |  |  |  |
Options – seasonal:(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Expected volatility |  |  |  |  |  |  | 33.81% |  |  |  | 25.35% |  |  |  |  |
Expected term |  |  |  |  |  |  | 2 years |  |  |  | 2 years |  |  |  |  |
Dividend yield |  |  |  |  |  |  | 3.48% |  |  |  | 2.80% |  |  |  |  |
Risk-free interest rate |  |  |  |  |  |  | 0.85% |  |  |  | 2.54% |  |  |  |  |
Weighted-average fair value |  |  |  |  |  | $ | 2.70 |  |  | $ | 2.83 |  |  |  |  |
ESPP options: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Expected volatility |  |  | 22.75% - 23.31% |  |  |  | 23.68% - 43.20% |  |  |  | 29.13% - 43.82% |  |  |  |  |
Expected term |  |  | 0.5years |  |  |  | 0.5 years |  |  |  | 0.5 years |  |  |  |  |
Dividend yield |  |  | 3.86% - 4.80% |  |  |  | 2.65% - 3.46% |  |  |  | 2.67% - 2.78% |  |  |  |  |
Risk-free interest rate |  |  | 0.19% - 0.23% |  |  |  | 0.20% - 0.33% |  |  |  | 0.27% - 2.13% |  |  |  |  |
Weighted-average fair value |  | $ | 2.16 |  |  | $ | 3.66 |  |  | $ | 4.38 |  |  |  |  |
(1) | This plan was terminated in fiscal year 2010, except for outstanding awards thereunder.
A summary of nonvested shares and performance nonvested share units for the year ended April 30, 2011, is as follows:
|  | (shares in 000s) |  |  |  |
|  |  |  |  | Weighted-Average |  |  |  |
|  |  |  |  | Grant Date |  |  |  |
|  | Shares |  |  | Fair Value |  |  |  |
Outstanding, beginning of the year |  |  | 1,619 |  |  | $ | 19.55 |  |  |  |  |
Granted |  |  | 745 |  |  |  | 12.56 |  |  |  |  |
Released |  |  | (632 | ) |  |  | 20.20 |  |  |  |  |
Forfeited |  |  | (232 | ) |  |  | 17.61 |  |  |  |  |
Outstanding, end of the year |  |  | 1,500 |  |  | $ | 15.92 |  |  |  |  |
The total fair value of shares vesting during fiscal years 2011, 2010 and 2009 was $13.0 million, $15.5 million and $21.1 million, respectively. Upon the grant of nonvested shares and performance nonvested share units, unearned compensation cost is recorded as an offset to additional paid-in capital and is amortized as compensation expense over the vesting period. As of April 30, 2011, we had $11.5 million of total unrecognized compensation cost related to these shares. This cost is expected to be recognized over a weighted-average period of 2 years.

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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 FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 2: 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 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 4: 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 5: 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 6: 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 7: 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 8: 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 + Details
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