Note 12: Stock Option Plans and Equity Incentive Plan
Our 2005 Equity Incentive Plan (the “Equity Incentive Plan”) authorizes our Board of Directors to grant incentive and non-statutory stock option grants, stock appreciation rights, restricted stock awards, restricted stock units, performance unit awards and performance share awards covering a maximum of 1,000 shares of our common stock. The Equity Incentive Plan replaced our prior stock option plans, under which there are no outstanding options. Pursuant to the Equity Incentive Plan, we granted incentive and non-statutory options to directors, officers and key employees at prices not less than 100% of the fair market value on the day of grant. All outstanding options expired in October 2011. In addition, we have granted restricted stock and restricted stock units to directors, officers and key employees. The Equity Incentive Plan provides for a variety of vesting dates. Our typical vesting period is three years.
Restricted Stock Units
Restricted stock units represent the right to receive one share of our common stock provided that the vesting conditions are satisfied. The following table represents restricted stock unit activity for fiscal 2013:
| Restricted Stock Units |
Weighted Average Grant Date Fair Value |
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Nonvested at June 1, 2012 |
203 | $ | 13.82 | |||||
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Granted |
73 | 17.11 | ||||||
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Vested |
(111 | ) | 12.91 | |||||
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Forfeited/canceled |
(11 | ) | 12.88 | |||||
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Nonvested at May 31, 2013 |
154 | $ | 16.13 | |||||
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We granted 73, 101 and 107 restricted stock units during fiscal 2013, 2012 and 2011, respectively. As of May 31, 2013, we have unrecognized share-based compensation cost of approximately $1,270 associated with restricted stock units. This cost is expected to be recognized over a weighted-average period of approximately 1.6 years. We had 246, 145 and 64 of vested restricted stock units as of May 31, 2013, 2012 and 2011, respectively, which received dividends upon vesting and are convertible to common shares five years after grant date.
The total fair value of shares that vested during fiscal 2013 was $1,439, which was calculated based on the closing price of our common stock on the Nasdaq Stock Market on the applicable date of vesting.
Accounting for Share Based Payments
Accounting guidance requires all share-based payments to employees, including grants of employee stock options, restricted stock and restricted stock units, to be recognized as compensation expense in the consolidated financial statements based on their fair values. Compensation expense is recognized over the period that an employee provides service in exchange for the award, approximately 3 years.
Forfeitures are estimated at the date of grant based on historical experience. We use the market price of our common stock on the date of grant to calculate the fair value of each grant of restricted stock and restricted stock units.
We recorded $1,330, $1,438 and $956 of stock-based compensation as part of selling, general and administrative expenses for fiscal 2013, 2012 and 2011, respectively.
We receive a tax deduction for certain stock option exercises during the period the options are exercised, generally for the excess of the fair value of our common stock at the date of exercise over the exercise price of the options, and dividends paid on vested restricted stock units. Excess tax benefits are realized tax benefits from tax deductions for exercised options in excess of the deferred tax asset attributable to stock compensation costs for such options. The total tax benefit realized from stock option exercises, shares issued and dividend payments for vested restricted stock units for fiscal 2013, 2012 and 2011 was $251, $102 and $37, respectively. Cash received from stock option exercises was $0, $0 and $197 for fiscal 2013, 2012 and 2011, respectively.