As of June 30, 2026, the Company has two active equity compensation plans which include the Amended and Restated Fiscal 2002 Share Incentive Plan (the “Fiscal 2002 Plan”) and the Amended and Restated Non-Employee Director Share Incentive Plan (collectively, the “Plans”). These Plans currently provide for the issuance of approximately 100.8 million shares of Class A Common Stock, which consist of shares cumulatively provided for and shares transferred to the Fiscal 2002 Plan from other inactive plans and employment agreements, to be granted in the form of stock-based awards to key employees and non-employee directors of the Company. As of June 30, 2026, approximately 11.8 million shares of Class A Common Stock were reserved and available to be granted pursuant to these Plans. The Company may satisfy the obligation of its stock-based compensation awards with either new or treasury shares. The Company’s equity compensation awards include stock options, restricted stock units (“RSUs”), performance share units (“PSUs”), long-term PSUs, including long-term price-vested units (“PVUs”), and share units.

The following is a summary of the status of the Company’s stock options as of June 30, 2026 and activity during the fiscal year then ended:


(Shares in thousands)	Shares	Weighted- Average Exercise Price Per Share		Aggregate Intrinsic Value(1) (in millions)		Weighted-Average Contractual Life Remaining in Years
Outstanding at June 30, 2025	8,686.5	$	175.21
Granted at fair value	1,210.3	92.18
Exercised	(651.8)	80.60
Expired	(522.5)	199.55
Forfeited	(75.8)	126.28
Outstanding at June 30, 2026	8,646.7	169.68		$	1	5.0

Vested and expected to vest at June 30, 2026	8,621.0	169.87		$	1	5.0

Exercisable at June 30, 2026	7,057.3	183.89		$	1	4.0

The exercise period for all stock options generally may not exceed ten years from the date of grant. Stock option grants to individuals generally become exercisable in three substantively equal tranches over a service period of up to four years. The Company attributes the value of option awards on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in substance, multiple awards.

The Company uses a weighted-average expected stock-price volatility assumption that is a combination of both current and historical implied volatilities of the underlying stock. The implied volatilities were obtained from publicly available data sources. For the weighted-average expected option life assumption, the Company considers the exercise behavior for past grants and models the pattern of aggregate exercises. The average risk-free interest rate is based on the U.S. Treasury strip rate for the expected term of the options and the average dividend yield is based on historical experience.

The Company granted RSUs in respect of approximately 3.6 million shares of Class A Common Stock during fiscal 2026 with a weighted-average grant date fair value per share of $91.59 that, at the time of grant, are scheduled to vest as follows: 1.2 million in fiscal 2027, 1.6 million in fiscal 2028 and 0.8 million in fiscal 2029. Vesting of RSUs is generally subject to the continued employment or the retirement of the grantees. The RSUs are generally accompanied by dividend equivalent rights, payable upon settlement of the RSUs either in cash or shares (based on the terms of the particular award) and, as such, were generally valued at the closing market price of the Company’s Class A Common Stock on the date of grant.

Included in the above are one-time awards granted in the first quarter of fiscal 2026, in respect of approximately 0.5 million shares of Class A Common Stock scheduled to cliff vest in fiscal 2028 with a weighted average grant-date fair value per share of $91.77, made under the PRGP Incentive Program which was implemented in an effort to incentivize and retain leaders who are critical to the success of the PRGP.

The Company has PSU awards outstanding, which will be settled in stock subject to the achievement of the Company’s net sales, diluted net earnings per common share and return on invested capital goals, respectively for the outstanding awards all subject to continued employment or the retirement of the grantees. For PSUs, no settlement will occur for results below the applicable minimum threshold. PSUs are accompanied by dividend equivalent rights that will be payable in cash upon settlement of the PSUs and, as such, were valued at the closing market value of the Company’s Class A Common Stock on the date of grant.

The following is a summary of the status of the Company’s PSUs as of June 30, 2026 and activity during the fiscal year then ended:


(Shares in thousands)	Shares	Weighted-Average Grant Date Fair Value Per Share
Nonvested at June 30, 2025	621.3	$	139.87
Granted	—	—
Vested and issued(1)	(14.5)	344.06
Forfeited	(109.6)	241.92
Nonvested at June 30, 2026	497.2	111.42

(1) The total fair value of PSUs vested and issued during fiscal 2026 and 2024 was $1 million and $7 million, respectively. No PSUs vested and were issued during fiscal 2025.

In February 2018, the Company granted to its then Chief Executive Officer ("CEO") PSUs with an aggregate payout of 195,940 shares (in two tranches of 97,970 shares each) of the Company’s Class A Common Stock, generally subject to continued employment through the end of the respective performance periods, which ended June 30, 2021 and 2022. No portion of the award would generally vest unless the Company has achieved positive Cumulative Operating Income, as defined in the performance share unit award agreement, during the relevant performance period. Settlement, if any, with respect to both tranches would be made on September 3, 2024. The PSUs are accompanied by dividend equivalent rights that were payable in cash at the same time as any payment of shares of Class A Common Stock. The grant date fair value of these PSUs of $27 million was estimated using the closing stock price of the Company’s Class A Common Stock as of the date of grant. On September 3, 2024, since the Company achieved positive Cumulative Operating Income, as defined in the PSU award agreement, and since the then CEO completed the requisite service, the Company issued 195,940 shares of the Company’s Class A Common Stock to its then CEO in accordance with the terms of these PSUs. At the time of issuance, the total fair value of shares granted was $18 million.

In March 2021, the Company granted to the its then CEO PSUs with an aggregate payout of 68,578 shares of the Company's Class A Common Stock, to incentivize him to continue serving through at least June 30, 2024. Generally, no portion of this award would vest unless the Company has achieved positive Cumulative Operating Income, as defined in the performance share unit award agreement, during the relevant performance period. The PSUs are accompanied by dividend equivalent rights that were payable in cash at the same time as any delivery of shares of the Company's Class A Common Stock. The aggregate grant date fair value of the PSUs of approximately $20 million was estimated using the closing stock price of the Company's Class A Common Stock on the date of grant. On September 2, 2025, since the Company achieved positive Cumulative Operating Income, as defined in the PSU award agreement, and since the then CEO completed the requisite service, the Company issued 68,578 shares of the Company’s Class A Common Stock to its former CEO, in accordance with the terms of the PSUs. At the time of issuance, the total fair value of shares granted was $6 million.

In March 2021, the Company granted to its then CEO PVUs with an aggregate payout of 85,927 shares, divided into three tranches, of the Company's Class A Common Stock, to incentivize him to continue serving through at least June 30, 2024. Generally, no portion of this award would vest unless the Company has achieved positive Cumulative Operating Income, as defined in the price-vested unit award agreement, during the relevant performance period. In addition, the vesting of each tranche was contingent upon the Company’s achievement of the respective stock price goal, which means that the average closing price per share of the Company’s Class A Common Stock traded on the New York Stock Exchange be at or above the applicable stock price goal (noted in the table below) for 20 consecutive trading days during the applicable performance period. The PVUs are accompanied by dividend equivalent rights that were payable in cash at the same time as any delivery of shares of the Company's Class A Common Stock.

Number of Shares per Tranche

Stock Price Goal (per Share)

Service Period

Performance Period for Stock Price Goal

Performance Period for Cumulative Operating Income Goal

Share Delivery Date

First tranche

27,457

323.03

March 11, 2021 - June 30, 2024

July 1, 2021 - June 30, 2025

September 2, 2025

Second tranche

28,598

333.21

March 11, 2021 - June 30, 2024

July 1, 2021 - June 30, 2025

September 2, 2025

Third tranche

29,872

343.61

March 11, 2021 - June 30, 2024

July 1, 2021 - June 30, 2025

September 2, 2025

Total shares

85,927

The Stock Price Goals (per Share) were all achieved during fiscal 2022 and on September 2, 2025, since the Company achieved positive Cumulative Operating Income as of June 30, 2025, as defined in the award agreement, and since the then CEO completed the requisite service, the Company issued 85,927 shares of the Company’s Class A Common Stock to its former CEO in accordance with the terms of the PVUs. At the time of issuance, the total fair value of shares granted was $8 million.

The Company grants share units to certain non-employee directors under the Amended and Restated Non-Employee Director Share Incentive Plan. The share units are convertible into shares of the Company’s Class A Common Stock as provided for in that plan. Share units are accompanied by dividend equivalent rights that are converted to additional share units when such dividends are declared.


(Shares in thousands)	Shares	Weighted-Average Grant Date Fair Value Per Share
Outstanding at June 30, 2025	106.9	$	90.15
Granted	12.2	95.75
Dividend equivalents	1.6	92.22
Converted (1)	(26.6)	79.60
Outstanding at June 30, 2026	94.1	93.88

(1) The total intrinsic value of share units converted during fiscal 2026, 2025 and 2024 was $3 million, $2 million, and $2 million, respectively.

Certain non-employee directors defer cash compensation in the form of cash payout share units, which are not subject to the Plans. These share units are classified as liabilities and, as such, their fair value is adjusted to reflect the current market value of the Company’s Class A Common Stock. The Company recorded $2 million as compensation expense, net for fiscal 2026, and recorded $3 million and $13 million as compensation income, net for fiscal 2025 and 2024, respectively, to reflect additional deferrals and the change in the market value.