Stock Based Compensation Plans

9 Months Ended

Jul. 31, 2013

Stock Based Compensation Plans Disclosure [Abstract]

Stock-Based Compensation Plans

13. Stock-Based Compensation Plans

The Company recognized total compensation cost related to its stock-based compensation plans as follows:

		Three Months Ended				Nine Months Ended
		July 31,				July 31,
(in thousands)		2013		2012		2013		2012
2008 Plan:
Stock options	$	3,316	$	6,314	$	10,841	$	21,758
Restricted shares		8,102		6,014		24,539		18,021
Phantom stock units		109		67		382		190
Employee Stock Purchase Plan		859		318		1,235		426
Incentive Plan – Stock Alternative		110		25		308		151
Atlanta Capital Plan		352		232		1,055		695
Parametric Plan		823		595		2,468		1,768
Total stock-based compensation expense	$	13,671	$	13,565	$	40,828	$	43,009

The total income tax benefit recognized for stock-based compensation arrangements was $4.4million and $4.1million for the three months ended July 31, 2013 and 2012, respectively, and $14.9million and $13.3million for the nine months ended July 31, 2013and 2012, respectively.

2008 Omnibus Incentive Plan (“2008 Plan”)

The 2008 Plan, which is administered by the Compensation Committee of the Board, allows for awards of stock options, restricted shares and phantom stock units to eligible employees and non-employee Directors. A total of 19.8million shares of Non-Voting Common Stock have been reserved for issuance under the 2008 Plan. Through July 31, 2013, 6.0million restricted shares and options to purchase 14.5million shares have been issued pursuant to the 2008 Plan.

Stock Options

The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option valuation model. The Black-Scholes option valuation model incorporates assumptions as to dividend yield, volatility, an appropriate risk-free interest rate and the expected life of the option. Many of these assumptions require management's judgment. The Company's stock volatility assumption is based upon its historical stock price fluctuations. The Company uses historical data to estimate option forfeiture rates and the expected term of options granted. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve at the time of grant.

The weighted-average fair value per share of stock options granted during the nine months ended July 31, 2013 and 2012 using the Black-Scholes option pricing model were as follows:

	2013	2012
Weighted-average grant date fair value
of options granted	$7.69	$6.69
Assumptions:
Dividend yield	2.8% to 5.5%	2.9% to 3.1%
Volatility	36% to 37%	35% to 36%
Risk-free interest rate	1.2% to 2.1%	1.0% to 1.6%
Expected life of options	7.1 years	7.2 years

Stock option transactions under the 2008 Plan and predecessor plans for the nine months ended July 31, 2013 are summarized in the below table.

(share and intrinsic value figures in thousands)	Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Options outstanding, beginning of period	27,653	$	26.90
Granted	2,271		28.41
Exercised	(4,703)		21.05
Forfeited/expired	(237)		29.70
Options outstanding, end of period	24,984	$	28.11	4.9	$	328,574
Options exercisable, end of period	16,114	$	28.98	3.4	$	204,875
Vested or expected to vest	24,629	$	28.13	4.9	$	323,626

The number of shares subject to option and the weighted-average exercise price of options reflected in the table above have been adjusted pursuant to certain anti-dilution provisions of the Company's 2008 Plan and predecessor plans to reflect the effect of a $1.00 per share special dividend declared and paid in December 2012.

The Company received $94.3million and $17.1million related to the exercise of options for the nine months ended July 31, 2013 and 2012, respectively. Options exercised represent newly issued shares. The total intrinsic value of options exercised during the nine months ended July 31, 2013 and 2012 was $66.2million and $10.4million, respectively. The total fair value of options that vested during the nine months ended July 31, 2013 was $28.1million.

As of July 31, 2013, there was $31.4million of compensation cost related to unvested stock options granted not yet recognized. That cost is expected to be recognized over a weighted-average period of 3.1 years.

Restricted Shares

Compensation expense related to restricted share grants is recorded over the forfeiture period of the restricted shares, as they are contingently forfeitable. As of July 31, 2013, there was $77.7million of compensation cost related to unvested awards not yet recognized. That cost is expected to be recognized over a weighted-average period of 3.3 years.

A summary of the Company's restricted share activity for the nine months ended July 31, 2013 under the 2008 Plan and predecessor plans is summarized in the below table:

		Weighted-
		Average
		Grant
		Date Fair
(share figures in thousands)	Shares	Value
Unvested, beginning of period	3,233	$	26.43
Granted	1,625		29.27
Vested	(767)		26.32
Forfeited	(133)		27.98
Unvested, end of period	3,958	$	27.60

The total fair value of restricted stock that vested during the nine months ended July 31,2013 and 2012was $20.2 million and $12.6 million, respectively.

Phantom Stock Units

In the nine months ended July 31, 2013, 9,565phantom stock units were issued to non-employee Directors pursuant to the 2008 Plan. Because these units are contingently forfeitable, compensation expense is recorded over the forfeiture period. The total liability paid out associated with phantom stock during the nine months ended July 31, 2013 and 2012 was $0.3 million and $0.2 million, respectively. As of July 31, 2013, there was $0.3million of compensation cost related to unvested awards not yet recognized. That cost is expected to be recognized over a weighted-average period of 1.1 years