Toro 2012 Annual Report Download - page 63
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Please find page 63 of the 2012 Toro 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.A reconciliation of the beginning and ending amount of unrecog- The number of unissued shares of common stock available for
nized tax benefits is as follows: future equity-based grants under the company’s equity-based com-
pensation plan was 4,448,174 as of October 31, 2012.
Balance as of October 31, 2011 $5,329 Stock Option Awards. Under the company’s incentive plan,
Decrease as a result of tax positions taken during a prior period (52) stock options are granted with an exercise price equal to the clos-
Increase as a result of tax positions taken during the current period 753 ing price of the company’s common stock on the date of grant, as
Decrease relating to settlements with taxing authorities (261)
Reduction as a result of a lapse of the applicable statute of reported by the New York Stock Exchange. Options are generally
limitations (1,348) granted to officers, other employees, and non-employee members
Balance as of October 31, 2012 $4,421 of the company’s Board of Directors on an annual basis in the first
quarter of the company’s fiscal year. Options generally vest one-
Included in the balance of unrecognized tax benefits as of Octo- third each year over a three-year period and have a ten-year term.
ber 31, 2012 are potential benefits of $3,122 that, if recognized, Other options granted to certain non-officer employees vest in full
would affect the effective tax rate from continuing operations. on the three-year anniversary of the date of grant and have a
The company recognizes potential accrued interest and penalties ten-year term. Compensation expense equal to the grant date fair
related to unrecognized tax benefits as a component of the provi- value is generally recognized for these awards over the vesting
sion for income taxes. In addition to the liability of $4,421 for period. Stock options granted to officers and other employees are
unrecognized tax benefits as of October 31, 2012 was an amount subject to accelerated expensing if the option holder meets the
of approximately $219 for accrued interest and penalties. To the retirement definition set forth in the plan. In that case, the fair
extent interest and penalties are not assessed with respect to value of the options is expensed in the fiscal year of grant
uncertain tax positions, the amounts accrued will be revised and because the option holder must be employed as of the end of the
reflected as an adjustment to the provision for income taxes. fiscal year in which the options are granted in order for the options
The company anticipates that total unrecognized tax benefits will to continue to vest following retirement. Similarly, if a non-
not change significantly within the next 12 months. employee director has served on the company’s Board of Directors
The company is subject to U.S. federal income tax as well as for ten full fiscal years or more, the fair value of the options
income tax of numerous state and foreign jurisdictions. The com- granted is fully expensed on the date of the grant.
pany is generally no longer subject to U.S. federal tax examina- The table below presents stock option activity for fiscal 2012:
tions for taxable years before fiscal 2009 and with limited excep-
tions, state and foreign income tax examinations for fiscal years
Weighted Weighted
before 2007. Stock Average Average
Option Exercise Contractual Intrinsic
Awards Price Life(years) Value
Outstanding as of
10 STOCK-BASED COMPENSATION PLANS October 31, 2011 3,763,384 $20.92 5.6 $25,117
Granted 493,088 28.14
The company maintains The Toro Company 2010 Equity and Exercised (1,032,742) 19.21
Incentive Plan, as amended, for officers, other employees, and Cancelled (23,914) 26.37
non-employee members of the company’s Board of Directors. The Outstanding as of
company’s incentive plan allows it to grant equity-based compen- October 31, 2012 3,199,816 $22.54 6.0 $62,982
sation awards, including stock options, restricted stock and Exercisable as of
restricted stock unit awards, and performance share awards. October 31, 2012 2,177,910 $20.38 5.0 $47,561
The compensation costs related to stock-based awards were as As of October 31, 2012, there was $1,459 of total unrecognized
follows: compensation expense related to unvested stock options. That
cost is expected to be recognized over a weighted-average period
Fiscal years ended October 31 2012 2011 2010 of 1.9 years.
Stock option awards $ 4,200 $4,654 $4,117 The following table presents the total market value of stock
Restricted stock awards 1,721 699 68 options exercised and the total intrinsic value of options exercised
Performance share awards 3,582 3,180 2,257 during the following fiscal years:
Total compensation cost for stock-based
awards $ 9,503 $8,533 $6,442
Fiscal years ended October 31 2012 2011 2010
Tax benefit realized for tax deductions from
Market value of stock options exercised $35,901 $25,592 $24,588
stock-based awards $13,266 $4,469 $4,933
Intrinsic value of options exercised 16,061 11,434 8,198
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