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Share-Based Compensation
 9 Months Ended
Jun. 01, 2013
Share-Based Compensation [Abstract]  
Share-Based Compensation

 

 

NOTE 7 – SHARE-BASED COMPENSATION

 

We utilize various share-based compensation plans as integral components of our overall compensation and associate retention strategy.  The compensation cost of our share-based compensation plans is included in selling, general, and administrative expenses in the accompanying condensed consolidated income statements and no share-based compensation was capitalized during the quarter or three quarters ended June 1, 2013.  The total cost of our share-based compensation plans was as follows for the periods presented (in thousands).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Three Quarters Ended

 

 

June 1,

 

 

May 26,

 

 

June 1,

 

 

May 26,

 

 

2013

 

 

2012

 

 

2013

 

 

2012

Performance awards

$
360 

 

$
949 

 

$
1,061 

 

$
2,822 

Management stock loan shares

 

 -

 

 

 -

 

 
497 

 

 

 -

Unvested share awards

 
100 

 

 
87 

 

 
284 

 

 
252 

Employee stock purchase plan

 
28 

 

 
20 

 

 
69 

 

 
59 

Fully vested share awards

 

 -

 

 

 -

 

 
22 

 

 

 -

Stock options

 

 -

 

 

 -

 

 

 -

 

 
168 

 

$
488 

 

$
1,056 

 

$
1,933 

 

$
3,301 

 

The following is a description of recent developments in our share-based compensation plans.

 

Performance Awards

 

There were no performance awards granted or modified during the quarter ended June 1, 2013.  Compensation expense recognized during the quarter and three quarters ended June 1, 2013 for performance awards includes expense related to awards granted in previously reported periods for which the performance targets are probable of being achieved.

 

Management Stock Loan Shares

 

During the second quarter of fiscal 2013, we determined that the breakeven price for management stock loans with shares held in escrow was achieved.  Accordingly, we transferred 3.3 million shares of common stock held by management loan participants in escrow to our transfer agent as full payment on the loans.  Since these loans were accounted for as share-based instruments, we recorded $0.5 million of share-based compensation expense for the value of the common stock retained by management stock loan participants that was in excess of the breakeven value on the date the loans were repaid.

 

Unvested Share Awards

 

Our annual unvested share awards granted to non-employee members of our Board of Directors is administered under the terms of the Franklin Covey Co. Second Amended and Restated 1992 Stock Incentive Plan, and is designed to provide our non-employee directors, who are not eligible to participate in our employee stock purchase plan, an opportunity to obtain an interest in the Company through the acquisition of shares of our common stock.  The annual unvested award is generally granted in January (following the annual shareholders’ meeting) of each year.  During January 2013, the fiscal 2012 award vested and was issued to the participating members of our Board of Directors.  For the fiscal 2013 award, each eligible director received a whole-share grant equal to $50,000 with a one-year vesting period, which resulted in a total of 30,672 shares granted to members of the Board of Directors under this program.  At June 1, 2013, there was $0.2 million of unrecognized compensation expense associated with the fiscal 2013 Board of Director unvested share award.

 

 

Employee Stock Purchase Plan

 

We have an employee stock purchase plan that offers qualified employees the opportunity to purchase shares of our common stock at a price equal to 85 percent of the average fair market value of our common stock on the last trading day of the calendar month in each fiscal quarter.  During the quarter and three quarters ended June 1, 2013, we issued 11,435 shares and 32,249 shares, respectively, to participants in the ESPP.

 

Stock Options

 

We have an incentive stock option plan whereby options to purchase shares of our common stock are issued to key employees at an exercise price not less than the fair market value of our common stock on the date of grant.  During the quarter ended June 1, 2013 we did not grant any new stock options or modify any existing stock option awards.  However, with the successful repayment of the management stock loan program, all 675,000 previously granted stock options that were outstanding at August 31, 2012 are now vested and exercisable.