Stock-Based Compensation

3 Months Ended

Nov. 28, 2020

Note 4. Stock-Based Compensation

The Company accounts for all share-based payments in accordance with ASC Topic 718, “Compensation—Stock Compensation,” as subsequently amended. Stock-based compensation expense included in operating expenses for the thirteen-week periods ended November 28, 2020 and November 30, 2019 was as follows:


	Thirteen Weeks Ended
	November 28,		November 30,
	2020		2019
Stock options	$	677	$	975
Restricted share awards		—		205
Restricted stock units		3,299		2,876
Performance share units		213		46
Associate Stock Purchase Plan		49		59
Total		4,238		4,161
Deferred income tax benefit		(1,030)		(1,040)
Stock-based compensation expense, net	$	3,208	$	3,121

Stock Options

The Company discontinued its grants of stock options in fiscal year 2020. The fair value of each option grant in previous fiscal years was estimated on the date of grant using the Black-Scholes option pricing model.

A summary of the Company’s stock option activity for the thirteen-week period ended November 28, 2020 is as follows:


	Options	Weighted-Average Exercise Price per Share		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding on August 29, 2020	1,539	$	75.76
Granted	—		—
Exercised	(77)		72.38
Canceled/Forfeited	(6)		78.70
Outstanding on November 28, 2020	1,456	$	75.93	3.2	$	16,069
Exercisable on November 28, 2020	1,210	$	74.70	2.9	$	14,845

The unrecognized share-based compensation cost related to stock option expense at November 28, 2020 was $3,026 and will be recognized over a weighted average period of 1.5 years. The total intrinsic value of options exercised, which represents the difference between the exercise price and market value of common stock measured at each individual exercise date, during the thirteen-week periods ended November 28, 2020 and November 30, 2019 was $837 and $941, respectively.

Performance Share Units

Beginning in fiscal 2020, the Company grants performance share units (“PSU”) as part of its long-term stock-based compensation program. PSUs cliff vest after a three year performance period based on achievement of specific performance goals. Based on the extent to which the targets are achieved, vested shares may range from zero to 200 percent of the target award amount.

The following table summarizes all transactions related to PSUs under the Company’s 2015 Omnibus Incentive Plan (based on target award amounts) for the thirteen-week period ended November 28, 2020:


	Shares	Weighted-Average Grant-Date Fair Value
Non-vested PSUs at August 29, 2020	28	$	76.32
Granted	31		74.79
Vested	—		—
Canceled/Forfeited	—		—
Non-vested PSUs at November 28, 2020 ⁽¹⁾	59	$	75.52
⁽¹⁾ Excludes approximately 4 shares of accrued incremental dividend equivalent rights on outstanding PSUs.

The fair value of each PSU is the closing stock price on the NYSE of the Company’s Class A common stock on the date of grant. Upon vesting, subject to achievement of performance goals, a portion of the PSU award may be withheld to satisfy the statutory income tax withholding obligation. The remaining PSUs will be settled in shares of the Company’s Class A common stock when vested. These awards accrue dividend equivalents on the underlying PSUs (in the form of additional stock units) based on dividends declared on the Company’s Class A common stock and these dividend equivalents are paid out in unrestricted common stock on the vesting dates of the underlying PSUs, subject to the same performance vesting requirements. The unrecognized share-based compensation cost related to the PSUs at November 28, 2020 was $3,621 and is expected to be recognized over a weighted average period of 2.5 years.

Restricted Stock Units

A summary of the Company’s non-vested Restricted Stock Unit (“RSU”) award activity under the Company’s 2015 Omnibus Incentive Plan for the thirteen-week period ended November 28, 2020 is as follows:


	Shares	Weighted-Average Grant-Date Fair Value
Non-vested RSUs at August 29, 2020	482	$	76.73
Granted	219		74.63
Vested	(137)		74.20
Canceled/Forfeited	(2)		77.65
Non-vested RSUs at November 28, 2020 ⁽¹⁾	562	$	76.53
⁽¹⁾ Excludes approximately 51 shares of accrued incremental dividend equivalent rights on outstanding RSUs.

The fair value of each RSU is the closing stock price on the NYSE of the Company’s Class A common stock on the date of grant. Upon vesting, a portion of the RSU award may be withheld to satisfy the statutory income tax withholding obligation. The remaining RSUs will be settled in shares of the Company’s Class A common stock when vested. These awards accrue dividend equivalents on the underlying RSUs (in the form of additional stock units) based on dividends declared on the Company’s Class A common stock and these dividend equivalents are paid out in unrestricted common stock on the vesting dates of the underlying RSUs. The unrecognized share-based compensation cost related to the RSUs at November 28, 2020 was $39,572 and is expected to be recognized over a weighted average period of 3.3 years.