Page 60 - 2018 Annual Report
P. 60

                 Table of Contents
 NOTE 9: SHARE-BASED COMPENSATION
Share-Based Incentive Plans
Following approval by the Company's shareholders in October 2015, the 2015 Long-Term Performance Plan (the "2015 Plan") replaced the 2011 Long-Term Performance Plan. The 2015 Plan, which expires in 2020, provides for granting of SARs, stock options, stock awards, cash awards, and such other awards or combination thereof as the Executive Organization and Compensation Committee or, in the case of director awards, the Corporate Governance Committee of the Board of Directors (together referred to as the Committee) may determine to officers, other key employees and members of the Board of Directors. Grants are generally made at regularly scheduled committee meetings. Compensation costs charged to expense under award programs paid (or to be paid) with shares (including SARs, stock options, performance shares, restricted stock, and RSUs) are summarized in the table below:
Year Ended June 30,
SARs and options         $ Performance shares
Restricted stock and RSUs
Total compensation costs under award programs         $
2017       2016 1,891     $ 1,543
 2018
 $ 1,961 2,006 2,660
$ 6,627
   1,331
2,298
5,520     $ 4,067
446 2,078
     Such amounts are included in selling, distribution and administrative expense in the accompanying statements of consolidated income. The total income tax benefit recognized in the statements of consolidated income for share- based compensation plans was $1,923, $4,848 and $1,595 for fiscal years 2018, 2017 and 2016, respectively. It has been the practice of the Company to issue shares from treasury to satisfy requirements of awards paid with shares.
The aggregate unrecognized compensation cost for share-based award programs with the potential to be paid at June 30, 2018 are summarized in the table below:
Cost of these programs will be recognized as expense over the weighted-average remaining vesting period of
2.1 years. The aggregate number of shares of common stock which may be awarded under the 2015 Plan is 2,500; shares available for future grants at June 30, 2018 were 1,655.
Stock Appreciation Rights and Stock Options
The weighted-average assumptions used for SARs and stock option grants issued in fiscal 2018, 2017 and 2016 are:
2017 2016 Expected life, in years         4.8 4.4
   June 30, 2018
Average Expected Period of Expected Recognition (Years)
     SARs and options       $ 3,729
2.5 1.7 1.9
   Performance shares   3,282
Restricted stock and RSUs   2,173
  Total unrecognized compensation costs under award programs $ 9,184
   2.1
        2018
6.0 2.1% 2.5%
24.3% $11.25
        Risk free interest rate
Dividend yield
Volatility
Per share fair value of SARs and stock options granted during the year
1.2% 1.3%
2.5% 2.5% 24.1% 26.0% $7.97 $6.79
  The expected life is based upon historical exercise experience of the officers, other key employees and members of the Board of Directors. The risk free interest rate is based upon U.S. Treasury zero-coupon bonds with remaining terms equal to the expected life of the SARs and stock options. The assumed dividend yield has been estimated based upon the Company’s historical results and expectations for changes in dividends and stock prices. The volatility assumption is calculated based upon historical daily price observations of the Company’s common stock for a period equal to the expected life.
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