Paychex 2011 Annual Report Download - page 62

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The Company has granted stock options to virtually all non-management employees with at least 90 days of
service, and shares remain outstanding for the following broad-based stock option grants:
Date of broad-based grant
Shares
granted
(millions)
Exercise
price
per share
Shares
outstanding as of
May 31, 2011
(millions) Vesting schedule
April 2004 ............ 1.7 $37.72 0.7 25% each April in 2005 through 2008
October 2006 .......... 2.0 $37.32 1.2 20% each October in 2007 through 2011
Prior to fiscal 2011, each April and October, the Company had granted options to newly hired employees who
met certain criteria. Beginning with grants issued in October 2005, such grants of options vest 20% per annum. Any
future grants of stock-based awards are subject to the discretion of the Board.
The following table summarizes stock option activity for the three years ended May 31, 2011:
Shares subject
to options
(millions)
Weighted-average
exercise price
per share
Weighted-average
remaining
contractual term
(years)
Aggregate intrinsic
value
(1)
(millions)
Outstanding as of May 31, 2008 .... 14.3 $35.00
Granted ...................... 1.0 $30.10
Exercised . . . ................. (0.4) $23.41
Forfeited ..................... (0.6) $36.11
Expired ...................... (0.3) $37.56
Outstanding as of May 31, 2009 .... 14.0 $34.84
Granted ...................... 1.4 $26.34
Exercised . . . ................. (0.4) $23.12
Forfeited ..................... (0.4) $33.35
Expired ...................... (0.4) $36.18
Outstanding as of May 31, 2010 .... 14.2 $34.31
Granted ...................... 0.5 $26.83
Exercised . . . ................. (0.4) $28.58
Forfeited ..................... (0.8) $29.68
Expired ...................... (1.0) $39.41
Outstanding as of May 31, 2011 .... 12.5 $34.14 4.6 $12.2
Exercisable as of May 31, 2011 ..... 10.4 $34.76 4.0 $ 5.4
(1) Market price of the underlying stock as of May 31, 2011 less the exercise price.
Other information pertaining to stock option grants is as follows:
In millions, except per share amounts 2011 2010 2009
Year ended May 31,
Weighted-average grant-date fair value of stock options granted (per
share) .................................................. $4.02 $4.37 $6.52
Total intrinsic value of stock options exercised . . . .................. $ 1.9 $ 1.4 $ 2.6
Total grant-date fair value of stock options vested . .................. $20.0 $19.0 $25.8
46
PAYCHEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)