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Share Based Compensation | 12 Months Ended
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Aug. 31, 2012
Share Based Compensation [Abstract] |
Share Based Compensation | P. SHARE BASED COMPENSATION Share Based Compensation Program Share based compensation is designed to reward employees for their long-term contributions to the Company and provide incentives for them to remain with the Company. The number and frequency of share grants are based on competitive practices, operating results of the Company, and individual performance. As of August 31, 2012, the Company’s share-based compensation plan was the 2010 Long-Term Incentive Plan (the “2010 Plan”). The 2010 Plan was approved by the stockholders of the Company, and became effective on January 25, 2010, and replaced the Company’s 2006 Long Term Incentive Plan. At August 31, 2012 the Company had share based awards outstanding under its 2001, 2006 and 2010 Long-Term Incentive Plans. The 2010 Plan provides for awards of stock options, restricted shares, restricted stock units, stock appreciation rights, performance shares and performance stock units to employees and non-employee directors of the Company. The maximum number of shares as to which stock awards may be granted under the 2010 Plan is 435,000 shares, exclusive of any forfeitures from the 2001 and 2006 Long Term Incentive Plans. At August 31, 2012, 297,962 shares of common stock (including forfeitures from prior plans) remained available for issuance under the 2010 Plan. All stock awards will be counted against the 2010 Plan in a 1 to 1 ratio. If options, restricted stock units or performance stock units awarded under the 2006 Plan or the 2001 Plan terminate without being fully vested or exercised, those shares will be available again for grant under the 2010 Plan. The 2010 Plan also limits the total awards that may be made to any individual. Share Based Compensation Information Stock Options – Stock option awards granted under the 2010 Plan have an exercise price equal to the closing price on the date of grant, expire no later than ten years from the date of grant and vest over a four-year period at 25 percent per year. The fair value of stock option awards is estimated using the Black-Scholes option pricing model. The table below shows the annual weighted-average assumptions used for valuation purposes.
|  |  |  |  |  |  |  |  |  | Grant Year
Weighed-Average Assumptions |  |  |  |  |  |  |  |  |  | Fiscal 2012
Risk-free interest rate |  |  |  |  |  |  |  |  |  | 1.7%
Dividend yield |  |  |  |  |  |  |  |  |  | 0.6%
Expected life (years) |  |  |  |  |  |  |  |  |  | 7
Volatility |  |  |  |  |  |  |  |  |  | 55.9%
Weighted-average grant-date fair value of options granted |  | $ | 31.04
There were no stock option awards granted for the years ended August 31, 2011 or 2010. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant; the dividend yield is calculated as the ratio of dividends paid per share of common stock to the stock price on the date of grant; the expected life is based on historical and expected exercise behavior; and volatility is based on the historical volatility of the Company’s stock price over the expected life of the option. The following table summarizes information about stock options outstanding as of and for the years ended August 31, 2012, 2011 and 2010:
|  | Number of Shares |  | Average Exercise Price |  | Average Remaining Contractual Term (years) |  | Aggregate Intrinsic Value ('000s)
Outstanding at August 31, 2010 |  | 291,625 |  | $ | 23.23 |  | 3.7 |  | $ | 3,977
Granted |  | - |  |  | - |  |  |  |  |
Exercised |  | (153,700) |  | $ | 23.28 |  |  |  | $ | 7,001
Forfeitures |  | (1,350) |  | $ | 24.33 |  |  |  |  |
Outstanding at August 31, 2011 |  | 136,575 |  | $ | 23.17 |  | 3.1 |  | $ | 5,331
Granted |  | 36,294 |  |  | 58.10 |  |  |  |  |
Exercised |  | (23,588) |  | $ | 24.10 |  |  |  | $ | 971
Forfeitures |  | (2,983) |  | $ | 58.10 |  |  |  |  |
Outstanding at August 31, 2012 |  | 146,298 |  | $ | 30.97 |  | 3.9 |  | $ | 5,031
Exercisable at August 31, 2010 |  | 284,875 |  | $ | 23.33 |  | 3.7 |  | $ | 3,858
Exercisable at August 31, 2011 |  | 136,575 |  | $ | 23.17 |  | 3.1 |  | $ | 5,331
Exercisable at August 31, 2012 |  | 112,987 |  | $ | 22.97 |  | 2.4 |  | $ | 4,789
There were no outstanding stock options that vested during the fiscal year ended August 31, 2012. There were 6,750 and 27,115 outstanding stock options that vested during the fiscal years ended August 31, 2011 and 2010, respectively. Additional information regarding stock option exercises is summarized in the table below.
|  |  | For the years ended August 31,
$ in thousands |  | 2012 |  | 2011 |  | 2010
Intrinsic value of stock options exercised |  | $ | 971 |  | $ | 7,001 |  | $ | 2,042
Cash received from stock option exercises |  | $ | 567 |  | $ | 3,579 |  | $ | 1,213
Tax benefit realized from stock option exercises |  | $ | 368 |  | $ | 2,628 |  | $ | 232
Aggregate grant-date fair value of stock options vested |  |  | N/A |  | $ | 8.13 |  | $ | 9.72
Restricted stock units - The restricted stock units granted to employees and directors under the 2010 Plan have a grant date fair value equal to the fair market value of the underlying stock on the grant date less present value of expected dividends. The restricted stock units granted to employees vest over a three-year period at approximately 33 percent per year. The restricted stock units granted to non-employee directors generally vest over a nine-month period. The following table summarizes information about restricted stock units as of and for the years ended August 31, 2012, 2011 and 2010:
|  | Number of Shares |  | Weighted-Average Grant-Date Fair Value
Restricted stock units at August 31, 2010 |  |  | 75,093 |  | $ | 38.61
Granted |  |  | 40,699 |  |  | 55.27
Vested |  |  | (40,337) |  |  | 43.91
Forfeited |  |  | (3,629) |  |  | 51.17
Restricted stock units at August 31, 2011 |  |  | 71,826 |  | $ | 47.99
Granted |  |  | 40,212 |  |  | 58.27
Vested |  |  | (37,381) |  |  | 47.87
Forfeited |  |  | (7,122) |  |  | 51.16
Restricted stock units at August 31, 2012 |  |  | 67,535 |  | $ | 54.35
Restricted stock units are generally settled with the issuance of shares with the exception of certain restricted stock units awarded to internationally-based employees that are settled in cash. At August 31, 2012, 2011 and 2010, outstanding restricted stock units included 4,873, 5,658 and 7,546 units, respectively, that will be settled in cash. The vesting date fair value of restricted stock units that vested was $1.7 million for each of the years ended August 31, 2012 and 2011. Performance stock units - The performance stock units granted to employees under the 2010 Plan have a grant date fair value equal to the fair market value of the underlying stock on the grant date less present value of expected dividends. The performance stock units granted to employees cliff vest after a three-year period and a specified number of shares of common stock will be awarded under the terms of the performance stock units, if performance measures relating to three-year average revenue growth and a three-year average return on net assets are achieved. The table below summarizes the status of the Company’s performance stock units as of and for the year ended August 31, 2012, 2011 and 2010:
|  | Number of Shares |  | Weighted-Average Grant-Date Fair Value
Performance stock units at August 31, 2010 |  |  | 87,701 |  | $ | 38.98
Granted |  |  | 27,932 |  |  | 55.45
Vested |  |  | (17,008) |  |  | 47.27
Forfeited |  |  | - |  |  | -
Performance stock units at August 31, 2011 |  |  | 98,625 |  | $ | 42.21
Granted |  |  | 19,386 |  |  | 57.09
Vested |  |  | - |  |  | -
Forfeited |  |  | (38,987) |  |  | 43.30
Performance stock units at August 31, 2012 |  |  | 79,024 |  | $ | 45.32
In connection with the performance stock units, the performance goals are based upon a three-year average revenue growth and a three-year average return on net assets over the performance period. The awards actually earned will range from zero to two hundred percent of the targeted number of performance stock units and will be paid in shares of common stock. Shares earned will be distributed upon vesting on the first day of November following the end of the three-year performance period. The Company is accruing compensation expense based on the estimated number of shares expected to be issued utilizing the most current information available to the Company at the date of the financial statements. If defined performance goals are not met, no compensation cost will be recognized and any previously recognized compensation expense will be reversed. Performance stock units that vested in fiscal 2011 represented 13,395 actual shares of common stock issued. No shares vested in fiscal 2012 as performance measures were not met. The vesting date fair value of performance stock units that vested was $0.6 million for the year ended August 31, 2011. As of August 31, 2012, there was $4.7 million pre-tax of total unrecognized compensation cost related to nonvested share-based compensation arrangements which is expected to be recognized over a weighted-average period of 1.9 years. The following table summarizes share-based compensation expense for the fiscal years ended August 31, 2012, 2011 and 2010:
|  |  | For the years ended August 31,
$ in thousands |  | 2012 |  | 2011 |  | 2010
Share-based compensation expense included in cost of |  |  |  |  |  |  |  |  |
operating revenues |  | $ | 225 |  | $ | 157 |  | $ | 123
Research and development |  |  | 189 |  |  | 120 |  |  | 60
Sales and marketing |  |  | 524 |  |  | 574 |  |  | 360
General and administrative |  |  | 3,001 |  |  | 2,623 |  |  | 1,663
Share-based compensation expense included in |  |  |  |  |  |  |  |  |
operating expenses |  |  | 3,714 |  |  | 3,317 |  |  | 2,083
Total share-based compensation expense |  |  | 3,939 |  |  | 3,474 |  |  | 2,206
Tax benefit |  |  | (1,493) |  |  | (1,317) |  |  | (836)
Share-based compensation expense, net of tax |  | $ | 2,446 |  | $ | 2,157 |  | $ | 1,370

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- 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 SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 2: 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 3: 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 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 AICPA -Name Statement of Position (SOP) -Number 93-6 -Paragraph 53 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: 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 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 123R -Paragraph 64, 65, A240 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: 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 + Details
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