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Share-Based Compensation Plans | 6 Months Ended
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Aug. 31, 2012
Share-Based Compensation Plans |
Share-Based Compensation Plans |
Note 14 – Share-Based Compensation Plans We have options and restricted shares outstanding under two expired and three active share-based compensation plans. During the three- and six-month periods ended August 31, 2012, the Company granted options to purchase 7,000 and 308,000 shares of common stock, respectively. For the fiscal year to date, these options were granted at exercise prices ranging from $31.68 to $34.72 per share to certain of our officers, employees and new hires. The fair value of the options were estimated using the Black-Scholes option pricing model to estimate fair values ranging from $10.17 to $14.57 for grants with terms of four and five years. The following assumptions were used for the grants: expected lives ranging from 4.05 to 4.35 years; risk free interest rates ranging from 0.55 to 0.86 percent; zero dividend yield; and expected volatilities ranging from 45.11 to 52.48 percent. During the three- and six-month periods ended August 31, 2012, the Company granted 3,750 and 7,500 shares of restricted stock, respectively, to certain board members having fair values at the date of grant ranging from $30.30 to $32.88 per share and a total value granted of $0.12 and $0.24 million, respectively. The restricted stock awards vested immediately and were valued at the fair value of the Company’s common stock at the date of the grant. A significant portion of our Chief Executive Officer’s current and long-term incentive compensation will be settled in restricted stock, as described below. The expense impact of this compensation for the three- and six-month periods ended August 31, 2012 has been included in the following table. On March 1, 2012, under the terms of his employment agreement, our Chief Executive Officer and President was granted 700,000 restricted stock units (the “Performance RSUs”), which may be earned in tranches based on the Company’s achievement of specified performance goals for fiscal years 2013, 2014 and 2015. Any earned Performance RSUs are subject to additional time-based vesting requirements. Up to 100,000 and 200,000 Performance RSUs may be earned based on the Company’s achievement of the specified performance goals for fiscal years 2013 and 2014, respectively. Up to 700,000 Performance RSUs (less the number of Performance RSUs previously earned, if any) may be earned based on the Company’s achievement of either the specified performance goals for fiscal year 2015 or the three year average performance goal for the three fiscal years 2013 through 2015. The Performance RSUs had a fair value at the date of grant of $32.88 per share for a grant date fair value of $23.02 million. Compensation expense associated with Performance RSUs is equal to the market value of our common stock on the date of the grant multiplied by the number of Performance RSUs vesting during any given period. Expense for each tranche must be estimated until earned, subject to a probability assessment of achieving the performance criteria specified for the tranche. We are recording the expense for each tranche over the related service periods. Our Chief Executive Officer and President is also eligible to receive an annual bonus, subject to the achievement of specified performance goals. Any such bonus that is earned and payable will be paid two-thirds in the form of cash or cash equivalents up to a maximum of $10.00 million. The remainder will be paid in the form of restricted stock. Any restricted stock granted will vest, with respect to annual bonuses for fiscal years 2013 and 2014, on February 28, 2015, and with respect to annual bonus for fiscal year 2015, on the date the Company certifies that the performance goals have been achieved. These restricted stock grants are accrued during the period they can be expected to vest. Accruals for Performance RSU’s and restricted stock grants are shown in the line below entitled “Performance based restricted stock awards and units.” During the three- and six-month periods ended August 31, 2012, employees exercised stock options to purchase 37,901 and 130,906 shares of common stock, respectively. We recorded share-based compensation expense in SG&A for the periods covered in the accompanying consolidated condensed financial statements as follows:
SHARE-BASED PAYMENT EXPENSE
(in thousands, except per share data)
|  | Three Months Ended August 31, |  | Six Months Ended August 31,
|  |  | 2012 |  |  | 2011 |  |  |  | 2012 |  |  | 2011 |
Stock options |  |  | $ | 612 |  |  | $ | 538 |  |  |  | $ | 1,159 |  |  | $ | 1,004 |
Directors stock compensation |  |  | 114 |  |  | - |  |  |  | 237 |  |  | - |
Performance based restricted stock awards and units |  |  | 663 |  |  | - |  |  |  | 1,595 |  |  | - |
Employee stock purchase plan |  |  | 138 |  |  | 159 |  |  |  | 138 |  |  | 159 |
Share-based payment expense |  |  | 1,527 |  |  | 697 |  |  |  | 3,129 |  |  | 1,163 |
Less income tax benefits |  |  | (193 | ) |  | (27 | ) |  |  | (458 | ) |  | (52 | )
Share-based payment expense, net of income tax benefits |  |  | $ | 1,334 |  |  | $ | 670 |  |  |  | $ | 2,671 |  |  | $ | 1,111 |
Earnings per share impact of share-based payment expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | $ | 0.04 |  |  | $ | 0.02 |  |  |  | $ | 0.08 |  |  | $ | 0.04 |
Diluted |  |  | $ | 0.04 |  |  | $ | 0.02 |  |  |  | $ | 0.08 |  |  | $ | 0.04 |

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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 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 2: 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 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 4: 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 5: 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 6: 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 7: 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 8: 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 + Details
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