XML 26 R15.htm IDEA: XBRL DOCUMENT
v3.20.2

Stock-Based Compensation | 9 Months Ended
--- | ---
May 31, 2020
Stock-Based Compensation [Abstract] |
Stock-Based Compensation | ﻿ ﻿ NOTE 8 – STOCK-BASED COMPENSATION ﻿ Ou r stock-based compensation was comprised of the following for the periods presented (in thousands):
﻿ |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |  |
﻿ |  | Quarter Ended |  | Three Quarters Ended
﻿ |  | May 31, |  |  | May 31, |  |  | May 31, |  |  | May 31,
﻿ |  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019
﻿Long-term incentive awards | $ | (5,326) |  | $ | 826 |  | $ | (2,124) |  | $ | 2,384
﻿Restricted stock awards |  | 175 |  |  | 175 |  |  | 525 |  |  | 525
﻿Employee stock purchase plan |  | 47 |  |  | 50 |  |  | 139 |  |  | 131
﻿ | $ | (5,104) |  | $ | 1,051 |  | $ | (1,460) |  | $ | 3,040
﻿ At each reporting date, we evaluate number and probability of shares expected to vest in each of our performance-based long-term incentive plan (LTIP) awards and adjust our stock-based compensation expense to correspond with the number of shares expected to vest over the anticipated service period. Due to the significant impact of the COVID-19 pandemic on our results of operations in the third quarter of fiscal 2020 and the uncertainties surrounding the recovery of the world’s economies, at May 31, 2020, we determined that the LTIP award tranches which are based on qualified adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA) for our fiscal 2015, 2016, 2017, 2019, and 2020 LTIP awards would not vest before the end of the respective service periods. We therefore reversed the previously recognized stock-based compensation expense associated with these awards at May 31, 2020, which resulted in a significant net credit to stock-based compensation for the quarter and three quarters ended May 31, 2020. The subscription sales based tranches of the 2018, 2019, and 2020 LTIP awards are still expected to vest to participants, but at reduced achievement levels. ﻿ During the three quarters ended May 31, 2020, we issued 281,479 shares of our common stock under various stock-based compensation arrangements. Our stock-based compensation plans also allow shares to be withheld to cover statutory income taxes if so elected by the award recipient. During the first three quarters of fiscal 2020, we withheld 103,117 shares of our common stock for taxes on stock-based compensation arrangements, which had a fair value of $3.6 million. The following is a description of the other developments in our stock-based compensation plans during the quarter and three quarters ended May 31, 2020. ﻿ Stock Options ﻿ During December 2019, our Chief Executive Officer (CEO) and Chief Financial Officer (CFO) exercised stock options. Nearly all of the stock options exercised would have expired in January 2020. The following information applies to our stock option activity during the three quarters ended May 31, 2020. ﻿
﻿ |  |  |  |  |
﻿ |  |  |  |  |
﻿ |  |  |  |  | Weighted
﻿ |  |  |  |  | Avg. Exercise
﻿ |  | Number of |  |  | Price Per
﻿ |  | Stock Options |  |  | Share
﻿Outstanding at August 31, 2019 |  | 568,750 |  | $ | 11.67
﻿Granted |  | - |  |  | -
﻿Exercised |  | (350,000) |  |  | (11.73)
﻿Forfeited |  | - |  |  | -
﻿ |  |  |  |  |
﻿Outstanding at May 31, 2020 |  | 218,750 |  | $ | 11.57
﻿ |  |  |  |  |
﻿Options vested and exercisable at |  |  |  |  |
﻿May 31, 2020 |  | 218,750 |  | $ | 11.57
﻿ The stock options were exercised on a net basis (no cash was paid to exercise the options) and we withheld 102,656 shares of our common stock with a fair value of $3.6 million for income taxes. The intrinsic value of the exercised options totaled $8.0 million and we recognized an income tax benefit of $1.8 million (Note 9) during the second quarter of fiscal 2020. Our remaining stock options outstanding at May 31, 2020 expire in January 2021. ﻿ Fiscal 2020 Restricted Stock Award ﻿ Our annual restricted stock award granted to non-employee members of the Board of Directors is administered under the terms of the 2019 Franklin Covey Co. Omnibus 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 award is granted in January (following the annual shareholders’ meeting) of each year. For the fiscal 2020 award, each eligible director received a whole-share grant equal to $100,000 with a one-year vesting period. Our restricted stock award activity during the three quarters ended May 31, 2020 consisted of the following: ﻿
﻿ |  |  |  |  |
﻿ |  |  |  |  |
﻿ |  |  |  |  | Weighted-Average
﻿ |  |  |  |  | Grant Date
﻿ |  | Number of |  |  | Fair Value
﻿ |  | Shares |  |  | Per Share
﻿Restricted stock awards at |  |  |  |  |
﻿August 31, 2019 |  | 28,525 |  | $ | 24.54
﻿Granted |  | 21,420 |  |  | 32.68
﻿Forfeited |  | - |  |  | -
﻿Vested |  | (28,525) |  |  | 24.54
﻿Restricted stock awards at |  |  |  |  |
﻿May 31, 2020 |  | 21,420 |  | $ | 32.68
﻿ At May 31, 2020, there was $0.4 million of unrecognized compensation expense remaining on the fiscal 2020 Board of Director restricted share award. ﻿ Fiscal 2020 Long-Term Incentive Plan Award ﻿ On October 18, 2019, the Organization and Compensation Committee of the Board of Directors granted a new LTIP award to our executive officers and members of senior management. The fiscal 2020 LTIP award is similar to the fiscal 2019 LTIP award and has three tranches, one of which has a time-based vesting condition and two of which have performance-based vesting conditions as described below: ﻿
| · |  | Time-Based Award Shares – Twenty-five percent of the 2020 LTIP award shares vest to participants after three years of service. The number of shares that may be earned by participants at the end of the service period totals 25,101 shares. The number of shares awarded in this tranche is not variable and does not fluctuate based on the achievement of financial measures.
﻿
| · |  | Performance-Based Award Shares – The remaining two tranches of the 2020 LTIP award are based on the highest rolling four-quarter levels of qualified Adjusted EBITDA and subscription service sales in the three-year period ended August 31, 2022. The number of shares that will vest to participants for these two tranches is variable and may be 50 percent of the award (minimum award threshold) or up to 200 percent of the participant’s award (maximum threshold) depending on the levels of qualified Adjusted EBITDA and subscription service sales achieved. The number of shares that may be earned for achieving 100 percent of the performance-based objectives totals 75,315 shares. The maximum number of shares that may be awarded in connection with the performance-based tranches of the 2020 LTIP totals 150,630 shares. At May 31, 2020, we determined that the Adjusted EBITDA tranche of the 2020 LTIP was improbable of vesting prior to August 31, 2022 and we reversed previously recognized stock-based compensation expense for this award tranche.
﻿ ﻿ ﻿ ﻿ The fiscal 2020 LTIP expires on August 31, 2022. ﻿ Employee Stock Purchase Plan ﻿ We have an employee stock purchase plan (ESPP) 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 each fiscal quarter. During the quarter and three quarters ended May 31, 2020, we issued 10,948 shares and 26,375 shares of our common stock to participants in the ESPP.

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + 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