Graco 2012 Annual Report Download - page 92

Download and view the complete annual report

Please find page 92 of the 2012 Graco 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 118

  • 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
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118

86
The following table depicts the number of shares authorized for issuance and availability under the 2010 Plan (shares in millions):
2010 Plan
Authorized for issuance 21.0
Issued and reserved for issuance of outstanding:
Options 0.8
Restricted stock units (2 1/2 times the number of awards) 8.2
Performance-based restricted stock units (2 1/2 times the number of awards) 3.1
Shares available for issuance 8.9
As of December 31, 2012, the Company had 10.4 million options outstanding under the 2003 plan. In addition, the Company had
1.5 million time-based and performance-based restricted stock units outstanding under the 2003 plan as of December 31, 2012.
The Company accounts for stock-based compensation pursuant to relevant authoritative guidance, which requires measurement
of compensation cost for all stock awards at fair value on the date of grant and recognition of compensation, net of estimated
forfeitures, over the requisite service period for awards expected to vest.
The table below summarizes the expense related to share-based payments for the years ended December 31, (in millions):
2012 2011 2010
Stock options $ 4.3 $ 12.5 $ 13.9
Restricted stock and restricted stock units 28.6 30.5 22.6
Stock-based compensation $ 32.9 $ 43.0 $ 36.5
Stock-based compensation, net of income tax benefit of $11.7 million, $11.2
million and $8.0 million in 2012, 2011 and 2010, respectively $ 21.2 $ 31.8 $ 28.5
The fair value of stock option awards granted was estimated using the Black-Scholes option pricing model with the following
weighted-average assumptions for the years ended December 31,:
2011 2010
Risk-free interest rate 2.6% 2.9%
Dividend yield 1.3% 1.4%
Expected volatility 39% 38%
Expected life (in years) 6.4 6.7
The Company considered the retirement and forfeiture provisions of the options and utilized its historical experience to estimate
the expected life of the options and volatility.