XML 77 R24.htm IDEA: XBRL DOCUMENT
v3.3.0.814

STOCK-BASED COMPENSATION PLANS | 12 Months Ended
--- | ---
Aug. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
STOCK-BASED COMPENSATION PLANS | NOTE 15. STOCK-BASED COMPENSATION PLANS The Company's stock-based compensation plans provide for the issuance of incentive and non-qualified stock options, restricted stock and units, stock appreciation rights and performance-based awards. The Compensation Committee of CMC's Board of Directors (the "Compensation Committee") approves all awards that are granted under the Company's stock-based compensation plans. Stock-based compensation expense for the years ended August 31, 2015, 2014 and 2013 of $23.5 million, $18.1 million and $18.7 million, respectively, is mainly included in selling, general and administrative expenses on the Company's consolidated statements of earnings. As of August 31, 2015, total unrecognized compensation cost related to unvested stock-based compensation arrangements was $21.9 million, which is expected to be recognized over a weighted-average period of three years, except for certain restricted stock units granted during fiscal 2014, which will vest over a weighted-average period of four years. The following table summarizes the total awards granted:
|  | Stock Options/SARs |  | Restricted Stock Awards/Units |  | Performance Awards
2015 Grants |  | — |  |  | 987,574 |  |  | 462,496 |
2014 Grants |  | — |  |  | 1,191,544 |  |  | 450,233 |
2013 Grants |  | 244,403 |  |  | 1,149,696 |  |  | 640,002 |
As of August 31, 2015, CMC had 12,744,798 shares available for future grants. Restricted Stock Units Restricted stock units issued under the Company's stock-based compensation plans provide that shares awarded may not be sold, transferred, pledged or assigned until service-based restrictions have lapsed. The restricted stock units granted to U.S. employees generally vest and are converted to CMC common stock in three equal installments on each of the first three anniversaries of the date of grant. The restricted stock units granted to non-U.S. employees generally vest and are settled in cash in three equal installments on each of the first three anniversaries of the date of grant. Generally, upon termination of employment, restricted stock awards that have not vested are forfeited. Upon death, disability or qualifying retirement, a pro-rata portion of the unvested restricted stock awarded will vest and become payable. Certain restricted stock units granted during fiscal 2014 will vest and either convert to CMC common stock or settle in cash after a specified service period; 25% vest two years from the date of grant; 25% vest three years from the date of grant; and the remaining 50% vest four years from the date of grant. The estimated fair value of the stock-settled restricted stock units is based on the closing price of CMC common stock on the date of grant, discounted for the expected dividend yield through the vesting period. Compensation cost related to the stock-settled restricted stock units is recognized ratably over the service period and is included in equity on the Company's consolidated balance sheets. The fair value of the cash-settled restricted stock units is remeasured each reporting period and is recognized ratably over the service period. The liability related to the cash-settled restricted stock units is included in accrued expenses and other payables on the Company's consolidated balance sheets. Performance Stock Units Performance stock units issued under the Company's stock-based compensation plans provide that shares awarded may not be sold, transferred, pledged or assigned until service-based restrictions have lapsed and any performance objectives have been attained as established by the Compensation Committee. Recipients of these awards generally must be actively employed by and providing services to the Company on the last day of the performance period in order to receive an award payout. Upon death, disability or qualifying retirement, a pro-rata portion of the performance stock units will vest and become payable at the end of the performance period. Compensation cost for performance stock units is accrued based on the probable outcome of specified performance conditions, net of estimated forfeitures. The Company accrues compensation cost if it is probable that the performance conditions will be met. The Company reassesses the probability of meeting the specified performance conditions at the end of each reporting period and adjusts compensation cost, as necessary, based on the probability of achieving the performance conditions. If the performance conditions are not met at the end of the performance period, the Company reverses the related compensation cost. Performance targets established by the Compensation Committee for performance stock units awarded in fiscal years 2015, 2014 and 2013 are weighted 75% based on the Company's cumulative EBITDA targets and positive return on invested capital ("ROIC") for the fiscal year in which the awards were granted and the succeeding two fiscal years, as approved by CMC's Board of Directors in the respective year's business plan, and 25% based on a three year relative total stockholder return metric. Performance stock units awarded to U.S. participants will be settled in CMC common stock. Award payouts range from a threshold of 50% to a maximum of 200% for each portion of the target awards. The performance stock units awarded in fiscal years 2015 and 2014 associated with the cumulative EBITDA targets have been classified as liability awards since the final EBITDA target will not be set until the third year of the performance period. Consequently, these awards are included in accrued expenses and other payables on the Company's consolidated balance sheets. The fair value of these performance stock units is remeasured each reporting period and is recognized ratably over the service period. The performance stock units awarded in fiscal 2013, as well as the performance stock units associated with the total stockholder return metric were valued at fair value on the date of grant using the Monte Carlo pricing model and are included in equity on the Company's consolidated balance sheets. Performance stock units awarded to non-U.S. participants in fiscal 2015, 2014 and 2013 will be settled in cash. The fair value of the performance stock units is remeasured each reporting period and is recognized ratably over the service period. The liability related to these awards is included in accrued expenses and other payables on the Company's consolidated balance sheets. In fiscal 2014, the Company reassessed the probability of achieving the specified performance conditions related to performance stock units awarded in fiscal 2012 and determined the Company did not meet the EBITDA and return on net assets ("RONA") targets at the end of the service period. As a result, the compensation cost previously recognized for these performance stock units was reversed in fiscal 2014. In fiscal 2013, the Company reassessed the probability of achieving the specified performance conditions related to performance stock units awarded in fiscal 2011 and determined the Company did not meet the EBITDA and RONA targets at the end of the service period. In addition, the Compensation Committee determined that the Company did not meet the total stockholder return vesting criteria at the end of the performance period for performance stock units awarded in fiscal 2010. As a result, the compensation cost previously recognized for these performance stock units was reversed in fiscal 2013. Information for restricted stock units and performance stock units, excluding the cash component, is as follows:
| Number |  | Weighted Average Grant-Date Fair Value
Outstanding as of September 1, 2012 | 1,683,572 |  |  | $ | 13.16 |
Granted | 1,159,451 |  |  | 13.60 |
Vested | (537,303 | ) |  | 13.35 |
Forfeited | (398,302 | ) |  | 12.22 |
Outstanding as of August 31, 2013 | 1,907,418 |  |  | 13.57 |
Granted | 1,275,355 |  |  | 16.89 |
Vested | (737,870 | ) |  | 13.55 |
Forfeited | (364,323 | ) |  | 14.94 |
Outstanding as of August 31, 2014 | 2,080,580 |  |  | 15.37 |
Granted | 1,468,696 |  |  | 15.79 |
Vested | (712,279 | ) |  | 14.33 |
Forfeited | (103,663 | ) |  | 15.51 |
Outstanding as of August 31, 2015 | 2,733,334 |  |  | $ | 15.86 |
The total fair value of shares vested during fiscal years 2015, 2014 and 2013 was $10.2 million, $10.0 million and $7.2 million, respectively. The Company granted 392,517 and 390,562 equivalent shares of restricted stock units and performance stock units accounted for as liability awards during the years ended August 31, 2015 and 2014, respectively. As of August 31, 2015, the Company had 898,259 equivalent shares of awards outstanding and expects 853,345 equivalent shares to vest. Stock Appreciation Rights and Stock Options Stock appreciation rights and stock options are awarded to certain employees with an exercise price equal to the market value of CMC common stock on the date of grant. No stock appreciation rights or stock options were granted during the years ended August 31, 2015 and 2014. Stock appreciation rights and stock options issued during the year ended August 31, 2013 are exercisable ratably over the three year vesting period and have a contractual term of seven years. The estimated fair value of stock appreciation rights and stock options granted under the Company's plans during the year ended August 31, 2013 of $0.6 million was estimated on the date of grant using the Black-Scholes Option Pricing Model with the following assumptions:
|  | 2013
Risk-free interest rate |  | 0.41 | %
Expected life, years |  | 3.0 |
Expected volatility |  | 43 | %
Expected dividend yield |  | 3.40 | %
Weighted average grant-date fair value per share |  | $ | 3.38 |
Combined activity for the Company's stock appreciation rights and stock options, excluding the cash component, is as follows:
| Number |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Life (Years) |  | Aggregate Intrinsic Value
Outstanding as of September 1, 2012 | 2,930,492 |  |  | $ | 24.81 |  |  |  |  |
Granted | 185,004 |  |  | 14.25 |  |  |  |  |
Exercised | (4,105 | ) |  | 11.60 |  |  |  |  |
Forfeited/Expired | (457,961 | ) |  | 24.91 |  |  |  |  |
Outstanding as of August 31, 2013 | 2,653,430 |  |  | $ | 24.07 |  |  | 2.8 |  | $ | 2,867,175 |
Exercised | (223,473 | ) |  | 11.84 |  |  |  |  |
Forfeited/Expired | (992,926 | ) |  | 32.93 |  |  |  |  |
Outstanding as of August 31, 2014 | 1,437,031 |  |  | $ | 19.85 |  |  | 2.7 |  | $ | 4,384,668 |
Exercised | (142,604 | ) |  | 11.80 |  |  |  |  |
Forfeited/Expired | (452,210 | ) |  | 35.10 |  |  |  |  |
Outstanding as of August 31, 2015 | 842,217 |  |  | $ | 13.04 |  |  | 2.7 |  | $ | 2,243,765 |
Exercisable at August 31, 2015 | 789,498 |  |  | $ | 12.95 |  |  | 2.6 |  | $ | 2,168,298 |
Remaining unvested stock appreciation rights and stock options expected to vest | 50,083 |  |  | $ | 14.27 |  |  |  |  |
The total intrinsic value of stock appreciation rights and stock options exercised during fiscal 2014 was $1.7 million. The aggregate intrinsic value of stock appreciation rights and stock options exercised during fiscal 2015 and 2013 was not material. Information related to stock appreciation rights and stock options as of August 31, 2015 is summarized below:
|  | Stock Appreciation Rights and Stock Options Outstanding |  | Stock Appreciation Rights and Stock Options Exercisable
Range of Exercise Prices |  | Number Outstanding |  | Weighted Average Remaining Contractual Life (In Years) |  | Weighted Average Exercise Price |  | Number Exercisable |  | Weighted Average Remaining Contractual Life (In Years) |  | Weighted Average Exercise Price
$11.00 | - | 14.68 |  | 720,511 |  |  | 2.7 |  | $ | 12.40 |  |  | 671,027 |  |  | 2.6 |  | $ | 12.27 |
$16.54 | - | 16.83 |  | 121,706 |  |  | 2.5 |  | $ | 16.81 |  |  | 118,471 |  |  | 2.5 |  | $ | 16.81 |
|  |  |  | 842,217 |  |  | 2.7 |  | $ | 13.04 |  |  | 789,498 |  |  | 2.6 |  | $ | 12.95 |
No cash-settled stock appreciation rights were granted during the years ended August 31, 2015 and 2014. As of August 31, 2015, the Company had 72,439 equivalent shares of cash-settled stock appreciation rights outstanding and expects 68,817 equivalent shares of cash-settled stock appreciation rights to vest. During the year ended August 31, 2013, the Company awarded 59,399 equivalent shares of stock appreciation rights to non-U.S. employees, which are settled in cash. The fair value of these stock appreciation rights is remeasured each reporting period and is recognized ratably over the service period. The liability related to these awards is included in accrued expenses and other payables on the Company's consolidated balance sheets. Stock Purchase Plan Almost all U.S. resident employees with one year of service at the beginning of each calendar year may participate in the Company's employee stock purchase plan. Each eligible employee may purchase up to 400 shares annually. The Board of Directors established the purchase discount of 15% based on market prices on specified dates for the years ended August 31, 2015, 2014 and 2013. Yearly activity of the stock purchase plan is as follows:
|  | 2015 |  | 2014 |  | 2013
Shares subscribed |  | 198,710 |  |  | 228,780 |  |  | 281,460 |
Price per share |  | $ | 13.73 |  |  | $ | 16.97 |  |  | $ | 12.61 |
Shares purchased |  | 172,170 |  |  | 221,570 |  |  | 211,580 |
Price per share |  | $ | 16.96 |  |  | $ | 12.61 |  |  | $ | 11.85 |
Shares available for future issuance |  | 3,810,924 |  |  |  |  |

X
- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration