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Share-Based Payments | 12 Months Ended
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Aug. 31, 2020
Share-based Payment Arrangement, Noncash Expense [Abstract] |
Share-Based Payments | Share-based Payments Omnibus Stock Compensation Incentive and Directors’ Equity Plans In January 2018, our stockholders approved the Amended and Restated Acuity Brands, Inc. 2012 Omnibus Stock Compensation Incentive Plan (the “Stock Incentive Plan”), which, among other things, resulted in an aggregate of 2.7 million of shares authorized for issuance pursuant to the Stock Incentive Plan. The Compensation Committee of the Board of Directors is authorized to issue awards consisting of incentive and non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance stock awards, performance stock units, stock bonus awards, and cash-based awards to eligible employees, non-employee directors, and outside consultants. Shares available for grant under the Stock Incentive Plan, including those previously issued and outstanding prior to the amendment, were approximately 0.7 million, 1.4 million, and 1.6 million at August 31, 2020, 2019, and 2018, respectively. Any shares subject to an award under the Stock Incentive Plan that are forfeited, canceled, expired, or settled for cash will be available for future grant under the Stock Incentive Plan. Effective for certain restricted stock and performance share grants awarded in fiscal 2020, the Compensation Committee of the Board of Directors reinstated a policy that provides for the continued vesting of stock awards following retirement for all eligible participants who have attained age 60 and have at least ten years of service with the Company. We deem the requisite service period for these awards for a participant to be the shorter of either the award's stated vesting period or the time from grant until the participant satisfies the age and service criteria. Compensation expense recognized related to the awards under the current and prior equity incentive plans during the periods presented is summarized as follows (in millions):
| Year Ended August 31,
| 2020 |  | 2019 |  | 2018
Restricted stock awards | $ | 24.6 |  |  | $ | 25.1 |  |  | $ | 27.9 |
Stock options | 4.9 |  |  | 2.7 |  |  | 3.1 |
Performance share units | 7.3 |  |  | — |  |  | — |
Director share units | 1.4 |  |  | 1.4 |  |  | 1.3 |
Total share-based payment expense | $ | 38.2 |  |  | $ | 29.2 |  |  | $ | 32.3 |
Restricted Stock Awards As of August 31, 2020, we had approximately 350,000 shares outstanding of restricted stock to officers, directors, and other key employees under the Stock Incentive Plan, including restricted stock units. The shares vest primarily over a four-year period and are valued at the closing stock price on the date of the grant. Activity related to restricted stock awards during the periods presented was as follows (in millions, except per share data):
| Number of Shares |  | Weighted Average Grant Date Fair Value Per Share
Outstanding at August 31, 2017 | 0.4 |  | $ | 197.41 |
Granted | 0.2 |  | $ | 154.95 |
Vested | (0.2) |  | $ | 177.79 |
Outstanding at August 31, 2018 | 0.4 |  | $ | 186.63 |
Granted | 0.2 |  | $ | 120.73 |
Vested | (0.2) |  | $ | 184.60 |
Forfeited* | — |  | $ | 159.88 |
Outstanding at August 31, 2019 | 0.4 |  | $ | 156.32 |
Granted | 0.2 |  | $ | 122.10 |
Vested | (0.1) |  | $ | 171.92 |
Forfeited | (0.1) |  | $ | 135.43 |
Outstanding at August 31, 2020 | 0.4 |  | $ | 134.68 |
___________________________ * Represents shares of less than 0.1 million. As of August 31, 2020, there was $26.2 million of total unrecognized compensation cost related to unvested restricted stock, which is expected to be recognized over a weighted-average period of 1.6 years. The total weighted average fair value of shares vested during the years ended August 31, 2020, 2019, and 2018 was approximately $22.8 million, $26.9 million, and $26.6 million, respectively. Stock Options As of August 31, 2020, we had approximately 915,000 options outstanding to officers and other key employees under the Stock Incentive Plan. Of these options, 815,000 vest and become exercisable over a three year period (the "Service Options"). The remaining 100,000 vest and become exercisable over a four year period and are also subject to a market condition (the "Market Options"). Options issued under the Stock Incentive Plan are generally granted with an exercise price equal to the fair market value of our stock on the date of grant, but never less than the fair market value on the grant date, and expire ten years from the date of grant. The fair value of each Service Option was estimated on the date of grant using the Black-Scholes model, and the fair value of each Market Option was estimated on the date of grant using the Monte-Carlo simulation model. The dividend yield was calculated based on annual dividends paid and the trailing 12-month average closing stock price at the time of grant. Expected volatility was based on historical volatility of our stock, calculated using the most recent time period equal to the expected life of the options. The risk-free interest rate was based on the U.S. Treasury yield for a term equal to the expected life of the options at the time of grant for the Service Options and equal to the contractual term for the Market Options. We used historical exercise behavior data of similar employee groups to determine the expected life of options. All inputs noted above are estimates made at the time of grant. All inputs into the Black-Scholes model and the Monte-Carlo simulation are estimates made at the time of grant. Actual realized value of each option grant could materially differ from these estimates, without impact to future reported net income. The following weighted average assumptions were used to estimate the fair value of the stock options granted in the fiscal years presented:
|  | Market Options |  | Service Options
|  | 2020 |  | 2020 |  | 2019 |  | 2018
Dividend yield |  | 0.4% |  | 0.4% |  | 0.4% |  | 0.3%
Expected volatility |  | 33.7% |  | 33.7% |  | 32.8% |  | 30.9%
Risk-free interest rate |  | 1.5% |  | 1.3% |  | 3.0% |  | 2.0%
Expected life of options |  | 7 years |  | 5 years |  | 4 years |  | 4 years
Weighted-average fair value of options |  | $44.74 |  | $34.22 |  | $34.06 |  | $41.87
There were no Market Options granted during the fiscal years ended August 31, 2019 or 2018. Stock option activity during the periods presented was as follows:
| Outstanding |  | Exercisable
| Number of Shares (in millions) |  | Weighted Average Exercise Price |  | Number of Shares (in millions) |  | Weighted Average Exercise Price
Outstanding at August 31, 2017 | 0.3 |  | $ | 156.43 |  |  | 0.2 |  | $ | 106.54 |
Granted | — | * | $ | 156.39 |  |  |  |  |  |
Exercised | — | * | $ | 115.27 |  |  |  |  |  |
Outstanding at August 31, 2018 | 0.3 |  | $ | 154.69 |  |  | 0.2 |  | $ | 134.13 |
Granted | 0.1 | * | $ | 116.40 |  |  |  |  |  |
Outstanding at August 31, 2019 | 0.4 |  | $ | 146.70 |  |  | 0.3 |  | $ | 147.51 |
Granted | 0.5 |  | $ | 121.87 |  |  |  |  |  |
Exercised | — | * | $ | 116.36 |  |  |  |  |  |
Outstanding at August 31, 2020 | 0.9 |  | $ | 133.19 |  |  | 0.4 |  | $ | 151.07 |
Range of option exercise prices: |  |  |  |  |  |  |
$40.01 - $100.00 (average life - 2.1 years) | 0.1 |  | $ | 62.25 |  |  | 0.1 |  | $ | 62.25 |
$100.01 - $160.00 (average life - 8.3 years) | 0.7 |  | $ | 123.01 |  |  | 0.2 |  | $ | 126.16 |
$160.01 - $210.00 (average life - 5.2 years) | 0.1 |  | $ | 207.80 |  |  | 0.1 |  | $ | 207.80 |
$210.01 - $239.76 (average life - 6.1 years) | — | * | $ | 239.76 |  |  | — | * | $ | 239.76 |
___________________________ * Represents shares of less than 0.1 million. The total intrinsic value of options exercised was de minimis during the year ended August 31, 2020 and $0.5 million during the year ended August 31, 2018. There were no options exercised during fiscal 2019. As of August 31, 2020, the total intrinsic value of options outstanding was $3.3 million, the total intrinsic value of options expected to vest was zero, and the total intrinsic value of options exercisable was $3.3 million. As of August 31, 2020, there was $15.2 million of total unrecognized compensation cost related to unvested options. That cost is expected to be recognized over a weighted-average period of approximately 1.9 years. Performance Share Units Beginning in fiscal 2020, the Board of Directors (the “Board”) approved grants of performance share units to certain executives and key employees. These shares vest over a three-year period and are valued at the closing stock price on the date of grant. During the second quarter, additional performance shares were issued to certain key employees that vest over a two-year period based on the level of achievement of established performance thresholds and were valued at the closing stock price on the date of grant. The actual number of performance shares earned for these awards will be determined at the end of the related two-year or three-year period based on the level of achievement of established performance thresholds. We recognize compensation expense for these awards proportionately over the requisite service period for each employee when it becomes probable that the performance metric will be satisfied. As of August 31, 2020, we had approximately 67,000 performance share units outstanding. There were no outstanding performance share units at August 31, 2019 and 2018. As of August 31, 2020 there was $1.9 million of total unrecognized compensation cost related to unvested performance share units. That cost is expected to be recognized over a weighted-average period of approximately 2.1 years. Employee Deferred Share Units We previously allowed employees to defer a portion of restricted stock awards granted in fiscal 2003 and fiscal 2004 into the SDSP as share units. The share units are payable in shares of stock at the time of distribution from the SDSP. As of August 31, 2020, approximately 7,500 fully vested share units remain deferred, but undistributed, under the Stock Incentive Plan. There was no compensation expense related to these share units during fiscal years 2020, 2019, and 2018. Director Deferred Share Units Total shares available for issuance under the Director Plan were approximately 320,000, 360,000, and 370,000 at August 31, 2020, 2019, and 2018, respectively. As of August 31, 2020, approximately 98,000 share units were deferred but undistributed under the Director Plan. Employee Stock Purchase Plan Employees are able to purchase, through payroll deduction, common stock at a 5% discount on a monthly basis. There were 1.5 million shares of our common stock reserved for purchase under the plan, of which approximately 1.0 million shares remain available as of August 31, 2020. Employees may participate at their discretion.

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