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Stock-Based Compensation | 9 Months Ended
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May 31, 2021
Stock-Based Compensation [Abstract] |
Stock-Based Compensation | NOTE 8 – STOCK-BASED COMPENSATION Our 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,
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020
Long-term incentive awards | $ | 2,144 |  | $ | (5,326) |  | $ | 4,458 |  | $ | (2,124)
Restricted stock awards |  | 175 |  |  | 175 |  |  | 525 |  |  | 525
Employee stock purchase plan |  | 51 |  |  | 47 |  |  | 144 |  |  | 139
| $ | 2,370 |  | $ | (5,104) |  | $ | 5,127 |  | $ | (1,460)
For the quarter and three quarters ended May 31, 2021, we issued 14,242 shares and 421,367 shares, respectively, of our common stock under various stock-based compensation arrangements, including our employee stock purchase plan (ESPP). 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 three quarters ended May 31, 2021, we withheld 147,092 shares of our common stock for taxes on stock-based compensation arrangements, which had a total fair value of $3.0 million. Due to the significant impact of the COVID-19 pandemic on our results of operations in the third quarter of fiscal 2020 and uncertainties surrounding the economic recovery from the pandemic, we determined that the long-term incentive plan (LTIP) award tranches which vest based on qualified adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA) for our various LTIP awards would not vest before the end of their respective service periods. On October 2, 2020, the Organization and Compensation Committee (the Compensation Committee) of the Board of Directors modified the terms of our performance-based LTIP award tranches to extend the service period of each tranche by two years and increase each Adjusted EBITDA vesting target by $2.0 million. No time-based vesting LTIP tranches were modified. During the first quarter of fiscal 2021, we reassessed the probability that the modified award tranches would vest and concluded the modified award tranches would vest prior to the end of their respective service periods. We accounted for the modifications in accordance with the applicable accounting guidance and are recognizing compensation cost for awards expected to vest over the remaining service period of each award. Stock Options On January 12, 2021, our Chief Executive Officer (CEO) exercised his remaining stock options, which would have expired on January 14, 2021. The following information applies to our stock options through May 31, 2021 (in thousands):
|  |  |  |  | Weighted
|  |  |  |  | Avg. Exercise
|  | Number of |  |  | Price Per
|  | Stock Options |  |  | Share
Outstanding at August 31, 2020 |  | 218,750 |  | $ | 11.57
Granted |  | - |  |  | -
Exercised |  | (218,750) |  |  | (11.57)
Forfeited |  | - |  |  | -
Outstanding at May 31, 2021 |  | - |  | $ | -
Options vested and exercisable at |  |  |  |  |
May 31, 2021 |  | - |  | $ | -
The stock options were exercised on a net basis (no cash was paid to exercise the options) and we withheld 51,738 shares of our common stock with a fair value of $1.3 million for income taxes. The intrinsic value of the exercised options totaled $2.9 million and we recognized an income tax benefit of $0.7 million, of which $0.5 million was recognized upon the exercise of the options. Fiscal 2021 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 2021 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, 2021 consisted of the following:
|  |  |  |  | Weighted-Average
|  |  |  |  | Grant Date
|  | Number of |  |  | Fair Value
|  | Shares |  |  | Per Share
Restricted stock awards at |  |  |  |  |
August 31, 2020 |  | 21,420 |  | $ | 32.68
Granted |  | 28,049 |  |  | 24.96
Forfeited |  | - |  |  | -
Vested |  | (21,420) |  |  | 32.68
Restricted stock awards at |  |  |  |  |
May 31, 2021 |  | 28,049 |  | $ | 24.96
At May 31, 2021, there was $0.4 million of unrecognized compensation expense remaining on the fiscal 2021 Board of Director restricted share award. Fiscal 2021 Long-Term Incentive Plan Award On October 2, 2020, the Compensation Committee granted a new LTIP award to our executive officers and members of senior management. The fiscal 2021 LTIP award has two tranches, one with a time-based vesting condition and one with a performance-based vesting condition as described below: Time-Based Award Shares – Twenty-five percent of the 2021 LTIP award shares vest to participants on August 31, 2023. The number of shares that may be earned by participants at the end of the service period totals 52,696 shares. The number of shares awarded in this tranche does not fluctuate based on the achievement of financial measures. Performance-Based Award Shares – The other tranche of the fiscal 2021 LTIP award is based on the highest rolling four-quarter level of qualified Adjusted EBITDA in the three-year period ending August 31, 2023. The number of shares that will vest to participants for this tranche 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 level of qualified Adjusted EBITDA achieved. The number of shares that may be earned for achieving 100 percent of the performance-based objective totals 158,088 shares. The maximum number of shares that may be awarded in connection with the performance-based tranche of the 2021 LTIP totals 316,176 shares. 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 each fiscal quarter. During the quarter and three quarters ended May 31, 2021, we issued 14,242 shares and 40,384 shares of our common stock to participants in the ESPP.

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