Emerson 2014 Annual Report Download - page 54

Download and view the complete annual report

Please find page 54 of the 2014 Emerson annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 66

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66

2014 Emerson > 50
Incentive shares plans also include restricted stock awards which involve distribution of common stock to key
management employees subject to cliff vesting at the end of service periods ranging from three to ten years. The
fair value of restricted stock awards is determined based on the average of the high and low market prices of the
Company’s common stock on the date of grant, with compensation expense recognized ratably over the applicable
service period. In 2014, 10,000 shares of restricted stock vested as a result of participants fulfilling the applicable
service requirements. Consequently, 6,709 shares were issued while 3,291 shares were withheld for income taxes
in accordance with minimum withholding requirements. As of September 30, 2014, there were 1,302,500 shares of
unvested restricted stock outstanding.
Changes in shares outstanding but not yet earned under incentive shares plans during the year ended September 30,
2014 follow:
aVerage grant date
(shares in thousands) shares fair Value per share
Beginning of year 11,231 $43.86
Granted 246 $65.15
Earned/vested (4,833) $39.52
Canceled (240) $47.48
End of year 6,404 $47.81
The total fair value of shares vested under incentive shares plans was $315, $19 and $15, respectively, in 2014, 2013
and 2012, of which $134, $8 and $6, respectively, was paid in cash, primarily for tax withholding. As of September 30,
2014, 4.3 million shares remained available for award under incentive shares plans.
Total compensation expense for stock options and incentive shares was $143, $221 and $100, for 2014, 2013 and
2012, respectively. The decrease in expense for 2014 is due to a reduced impact from performance shares plans
overlap in the current year and the comparative benefit of a slightly lower stock price, partially offset by a stock
option award in 2014. The increase in 2013 reflects the overlap of two performance shares plans (2010 awards for
performance through 2013 and 2013 awards for performance through 2016) and a large increase in the stock price
during the year. Income tax benefits recognized in the income statement for these compensation arrangements
during 2014, 2013 and 2012 were $39, $68 and $28, respectively. As of September 30, 2014, total unrecognized
compensation expense related to unvested shares awarded under these plans was $243, which is expected to be
recognized over a weighted-average period of 2.3 years.
In addition to the employee stock option and incentive shares plans, in 2014 the Company awarded 17,676 shares
of restricted stock and 3,928 restricted stock units under the restricted stock plan for nonmanagement directors. As
of September 30, 2014, 248,146 shares were available for issuance under this plan.
(15) Common and Preferred Stock
At September 30, 2014, 38.7 million shares of common stock were reserved for issuance under the Company’s
stock-based compensation plans. During 2014, 14.8 million common shares were purchased and 4.7 million
treasury shares were reissued. In 2013, 20.3 million common shares were purchased and 2.9 million treasury shares
were reissued.
At September 30, 2014 and 2013, the Company had 5.4 million shares of $2.50 par value preferred stock
authorized, with none issued.