Red Lobster 2012 Annual Report Download - page 68

Notes to Consolidated Financial Statements
Darden
64 Darden Restaurants, Inc. 2012 Annual Report
The following table presents a summary of our stock option activity as of and for the year ended May 27, 2012:
Weighted-Average Weighted-Average Aggregate
Options Exercise Price Remaining Intrinsic Value
(in millions) Per Share Contractual Life (Yrs) (in millions)
Outstanding beginning of period 13.0 $32.77 5.53 $235.6
Options granted 1.6 51.06
Options exercised (2.2) 28.12
Options canceled (0.1) 35.71
Outstanding end of period 12.3 $36.05 5.58 $209.3
Exercisable 7.2 $32.28 3.90 $150.0
The total intrinsic value of options exercised during fiscal 2012, 2011 and 2010
was $49.7 million, $49.9 million and $59.1 million, respectively. Cash received from
option exercises during fiscal 2012, 2011 and 2010 was $62.9 million, $55.7 million
and $59.3 million, respectively. Stock options have a maximum contractual period
of ten years from the date of grant. We settle employee stock option exercises
with authorized but unissued shares of Darden common stock or treasury shares
we have acquired through our ongoing share repurchase program.
As of May 27, 2012, there was $33.4 million of unrecognized compensation
cost related to unvested stock options granted under our stock plans. This cost is
expected to be recognized over a weighted-average period of 2.5 years. The total
fair value of stock options that vested during fiscal 2012 was $21.1 million.
Restricted stock and RSUs are granted at a value equal to the market price
of our common stock on the date of grant. Restrictions lapse with regard to
restricted stock, and RSUs are settled in shares, at the end of their vesting periods,
which is generally four years.
The following table presents a summary of our restricted stock and RSU
activity as of and for the fiscal year ended May 27, 2012:
Weighted-Average
Shares Grant Date Fair
(in millions) Value Per Share
Outstanding beginning of period 0.6 $29.36
Shares granted 0.1 46.71
Shares vested (0.4) 34.44
Outstanding end of period 0.3 $39.63
As of May 27, 2012, there was $4.6 million of unrecognized compensation
cost related to unvested restricted stock and RSUs granted under our stock plans.
This cost is expected to be recognized over a weighted-average period of 2.5 years.
The total fair value of restricted stock and RSUs that vested during fiscal 2012,
2011 and 2010 was $10.0 million, $9.1 million and $9.4 million, respectively.
Darden stock units are granted at a value equal to the market price of our
common stock on the date of grant and will be settled in cash at the end of their
vesting periods, which range between four and five years, at the then market price
of our common stock. Compensation expense is measured based on the market
price of our common stock each period, is amortized over the vesting period
and the vested portion is carried as a liability in our accompanying consolidated
balance sheets. We also entered into equity forward contracts to hedge the risk
of changes in future cash flows associated with the unvested, unrecognized
Darden฀stock฀units฀granted฀(see฀Note฀10฀–฀Derivative฀Instruments฀and฀Hedging฀
Activities for additional information).
The following table presents a summary of our Darden stock unit activity as
of and for the fiscal year ended May 27, 2012:
Units Weighted-Average
(in millions) Fair Value Per Unit
Outstanding beginning of period 1.9 $50.92
Units granted 0.6 50.08
Units vested (0.3) 48.74
Units canceled (0.1) 39.38
Outstanding end of period 2.1 $53.06
Based on the value of our common stock as of May 27, 2012, there was
$48.7 million of unrecognized compensation cost related to Darden stock units
granted under our incentive plans. This cost is expected to be recognized over
a weighted-average period of 2.9 years. Darden stock units with a fair value of
$12.1 million vested during fiscal 2012.
The following table presents a summary of our performance stock unit
activity as of and for the fiscal year ended May 27, 2012:
Units Weighted-Average
(in millions) Fair Value Per Unit
Outstanding beginning of period 1.0 $37.91
Units granted 0.3 51.45
Units vested (0.2) 50.42
Units canceled — —
Outstanding end of period 1.1 $39.33