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Stock Compensation Plan | 12 Months Ended
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Jul. 31, 2011
Stock Compensation Plan |
Stock Compensation Plan |
17. | Stock Compensation Plan
The Company has a share award plan (the "Plan") which has been approved by the Company's shareholders. Under the Plan, 7.5 million shares of common stock could be issued in the form of options, stock appreciation rights, restricted shares, restricted share units, performance shares, performance share units, dividend equivalents or other share-based awards to employees, directors or consultants of the Company or its subsidiaries or affiliates. The terms of awards granted under the Plan, including exercise price, vesting period and life, are set by the Compensation Committee of the Board of Directors. All share-based awards (except for restricted shares and restricted share units) granted under the Plan have a life of ten years. Most awards vest ratably over three years; however, some have been granted with different vesting schedules. To date, no awards have been granted to non-employees (except those granted to non-employee members of the Board of Directors of the Company and of a consolidated subsidiary) under the Plan. At July 31, 2011, approximately 3.0 million share-based awards were available to be granted under the Plan. The fair value of stock-settled stock appreciation rights ("SARs") granted in the years ended July 31, 2011, 2010 and 2009 were estimated on the date of grant using a lattice-based option valuation model that applies the assumptions noted in the table below. A lattice-based model considers factors such as exercise behavior, and assumes employees will exercise equity awards at different times over the contractual life of the equity awards. As a lattice-based model considers these factors, and is more flexible, the Company considers it to be a better method of valuing equity awards than a closed-form Black-Scholes model. Because lattice-based option valuation models incorporate ranges of assumptions for inputs, those ranges are disclosed. Expected volatility is based on historical volatility of the Company's stock. The Company uses historical data to estimate equity award exercises and employee terminations within the valuation model; separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected term of equity awards granted is derived from the output of the option valuation model and represents the period of time that equity awards granted are expected to be outstanding; the range given below results from certain groups of employees exhibiting different behavior. The risk-free rate for periods within the contractual life of the equity award is based on the United States Treasury yield curve in effect at the time of grant.
|  | Year Ended July 31, |
|  | 2011 |  |  | 2010 |  |  | 2009 |
Expected volatility |  |  | 42.5 | % |  |  | 43.3 | % |  |  | 37.1-41.0 | %
Expected dividends |  |  | -- | % |  |  | -- | % |  |  | -- | %
Expected term (average in years) |  |  | 4.6 |  |  |  | 4.7 |  |  |  | 5.4-5.7 |
Risk-free rate |  |  | 0.3-4.5 | % |  |  | 0.4-4.6 | % |  |  | 2.1-4.9 | %
The Company has estimated forfeiture rates that range from 17.7% to 20.1% based upon the class of employees receiving stock-based compensation in its calculation of stock-based compensation expense for the year ended July 31, 2011. These estimates are based on historical forfeiture behavior exhibited by employees of the Company. A summary of aggregate option and SARs award activity under the Plan as of July 31, 2009, 2010 and 2011, and changes during the years then ended is presented below (in thousands, except exercise price and contractual term):
|  | Awards |  |  | Weighted-Average Exercise Price |  |  | Weighted-Average Remaining Contractual Term |  |  | Aggregate Intrinsic Value |
Outstanding at August 1, 2008 |  |  | 1,219 |  |  | $ | 32.83 |  |  |  |  |  |  |  |  |
Granted |  |  | 1,055 |  |  |  | 27.88 |  |  |  |  |  |  |  |  |
Exercised |  |  | (31 | ) |  |  | 17.54 |  |  |  |  |  |  |  |  |
Forfeited or expired |  |  | (60 | ) |  |  | 38.97 |  |  |  |  |  |  |  |  |
Outstanding at July 31, 2009 |  |  | 2,183 |  |  | $ | 30.49 |  |  |  |  |  |  |  |  |
Granted |  |  | 377 |  |  |  | 35.86 |  |  |  |  |  |  |  |  |
Exercised |  |  | (46 | ) |  |  | 23.60 |  |  |  |  |  |  |  |  |
Forfeited or expired |  |  | (137 | ) |  |  | 42.30 |  |  |  |  |  |  |  |  |
Outstanding at July 31, 2010 |  |  | 2,377 |  |  | $ | 30.80 |  |  |  |  |  |  |  |  |
Granted |  |  | 371 |  |  |  | 37.40 |  |  |  |  |  |  |  |  |
Exercised |  |  | (67 | ) |  |  | 20.06 |  |  |  |  |  |  |  |  |
Forfeited or expired |  |  | (20 | ) |  |  | 28.59 |  |  |  |  |  |  |  |  |
Outstanding at July 31, 2011 |  |  | 2,661 |  |  | $ | 32.02 |  |  |  | 6.6 years |  |  | $ | 38,891 |
Exercisable at July 31, 2011 |  |  | 1,361 |  |  | $ | 34.12 |  |  |  | 5.2 years |  |  | $ | 18,172 |
The weighted-average grant-date fair value of SARs granted during the years ended July 31, 2011, 2010 and 2009 was $13.84, $13.70 and $10.34, respectively. The total intrinsic value of options and SARs exercised during the years ended July 31, 2011, 2010 and 2009 was $2.0 million, $0.7 million and $0.3 million, respectively. The Company had 288,000, 241,000 and 315,000 options and SARs that vested during the years ended July 31, 2011, 2010 and 2009, respectively. These awards had a total fair value of $0.7 million, $0.6 million and $1.5 million at the date of vesting for the years ended July 31, 2011, 2010 and 2009, respectively. A summary of the status of the Company's nonvested SARs as of July 31, 2011, and changes during the year then ended, is presented below (in thousands, except fair value amounts):
|  | Awards |  |  | Weighted-Average Grant-Date Fair Value |
Outstanding at July 31, 2010 |  |  | 1,228 |  |  | $ | 7.37 |
Granted |  |  | 371 |  |  |  | 13.84 |
Vested |  |  | (288 | ) |  |  | 14.98 |
Forfeited |  |  | (11 | ) |  |  | 10.95 |
Nonvested at July 31, 2011 |  |  | 1,300 |  |  | $ | 11.17 |
A summary of the status of the Company's nonvested restricted share units as of July 31, 2011, and changes during the year then ended, is presented below (in thousands, except fair value amounts):
|  | Awards |  |  | Weighted-Average Grant-Date Fair Value |
Outstanding at July 31, 2010 |  |  | 371 |  |  | $ | 30.07 |
Granted |  |  | 201 |  |  |  | 37.03 |
Vested |  |  | (143 | ) |  |  | 41.22 |
Forfeited |  |  | (21 | ) |  |  | 27.86 |
Nonvested at July 31, 2011 |  |  | 408 |  |  | $ | 33.47 |
The Company granted 201,000 restricted share units during the year ended July 31, 2011 with a weighted-average grant-date fair value of $37.03. The Company granted 136,000 restricted share units during the year ended July 31, 2010 with a weighted-average grant-date fair value of $36.11. The Company granted 397,000 restricted share units during the year ended July 31, 2009 with a weighted-average grant-date fair value of $26.83. The Company had 143,000, 135,000 and 137,000 restricted share awards/units that vested during the years ended July 31, 2011, 2010 and 2009, respectively. These awards/units had a total fair value of $5.9 million, $4.9 million and $3.1 million at the date of vesting for the years ended July 31, 2011, 2010 and 2009, respectively. As of July 31, 2011, there was $13.1 million of total unrecognized compensation expense related to nonvested share-based compensation arrangements granted under the Plan, of which $8.0 million, $4.4 million and $0.7 million of expense is expected to be recognized in the years ending July 31, 2012, 2013 and 2014, respectively, assuming no future share-based awards are granted. Cash received from options exercised under all share-based payment arrangements was $1.1 million, $0.5 million and $0.6 million for the years ended July 31, 2011, 2010 and 2009, respectively. The tax benefit realized or to be realized for the tax deductions from options/SARs exercised and restricted stock awards/units vested was $2.5 million, $2.1 million and $1.6 million for the years ended July 31, 2011, 2010 and 2009, respectively. The Company has a policy of using either authorized and unissued shares or treasury shares, including shares acquired by purchase in the open market or in private transactions, to satisfy equity award exercises.

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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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