Toro 2013 Annual Report Download - page 63

The compensation costs related to stock-based awards were as The table below presents stock option activity for fiscal 2013:
follows:
Weighted Weighted
Stock Average Average
Fiscal years ended October 31 2013 2012 2011 Option Exercise Contractual Intrinsic
Stock option awards $ 4,710 $ 4,200 $4,654 Awards Price Life(years) Value
Restricted stock and restricted stock unit Outstanding as of October 31,
awards 1,694 1,721 699 2012 3,199,816 $22.54 6.0 $ 62,982
Performance share awards 3,833 3,582 3,180 Granted 381,639 42.14
Total compensation cost for stock-based Exercised (498,513) 18.63
awards $10,237 $ 9,503 $8,533 Cancelled (13,164) 35.91
Tax benefit realized for tax deductions from Outstanding as of
October 31, 2013 3,069,778 $25.55 5.9 $102,493
stock-based awards $10,614 $13,266 $4,469
Exercisable as of
The number of unissued shares of common stock available for October 31, 2013 2,220,781 $21.97 4.9 $ 82,099
future equity-based grants under the company’s equity-based com-
As of October 31, 2013, there was $1,712 of total unrecognized
pensation plan was 3,873,904 as of October 31, 2013. Stock
compensation expense related to unvested stock options. That
options, restricted stock and restricted stock units, and perform-
cost is expected to be recognized over a weighted-average period
ance shares are issued from treasury shares.
of 1.9 years.
Stock Option Awards. Under the company’s incentive plan, The following table presents the total market value of stock
stock options are granted with an exercise price equal to the clos- options exercised and the total intrinsic value of options exercised
ing price of the company’s common stock on the date of grant, as during the following fiscal years:
reported by the New York Stock Exchange. Options are generally
granted to officers, other employees, and non-employee members Fiscal years ended October 31 2013 2012 2011
of the company’s Board of Directors on an annual basis in the first
Market value of stock options exercised $23,160 $35,901 $25,592
quarter of the company’s fiscal year. Options generally vest Intrinsic value of options exercised 13,875 16,061 11,434
one-third each year over a three-year period and have a ten-year
The fair value of each stock option is estimated on the date of
term. Other options granted to certain non-officer employees vest
grant using the Black-Scholes valuation method with the assump-
in full on the three-year anniversary of the date of grant and have
tions noted in the table below. The expected life is a significant
a ten-year term. Compensation expense equal to the grant date
assumption as it determines the period for which the risk-free inter-
fair value is generally recognized for these awards over the vesting
est rate, volatility, and dividend yield must be applied. The
period. Stock options granted to officers and other employees are
expected life is the average length of time in which officers, other
subject to accelerated expensing if the option holder meets the
employees, and non-employee directors are expected to exercise
retirement definition set forth in the plan. In that case, the fair
their stock options, which is primarily based on historical experi-
value of the options is expensed in the fiscal year of grant
ence. Separate groups of employees that have similar historical
because the option holder must be employed as of the end of the
exercise behavior are considered separately for valuation pur-
fiscal year in which the options are granted in order for the options
poses. Expected volatilities are based on the movement of the
to continue to vest following retirement. Similarly, if a
company’s common stock over the most recent historical period
non-employee director has served on the company’s Board of
equivalent to the expected life of the option. The risk-free interest
Directors for ten full fiscal years or more, the fair value of the
rate for periods within the contractual life of the option is based on
options granted is fully expensed on the date of the grant.
the U.S. Treasury rate over the expected life at the time of grant.
Dividend yield is estimated over the expected life based on the
company’s historical cash dividends paid, expected future cash div-
idends and dividend yield, and expected changes in the company’s
stock price.
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