Stock-Based Compensation Plans | 8. Stock-Based Compensation Plans Stock Options and Restricted Stock The maximum number of shares of the Company’s common stock that may be issued or transferred pursuant to awards under the 2014 Plan equals the sum of: (1) 2,400,000 shares, plus (2) the number of shares subject to stock options granted under the Resources Connection, Inc. 2004 Performance Incentive Plan and the 1999 Long Term Incentive Plan (the “Prior Stock Plans”) and outstanding as of September 3, 2014 (the date at which the Prior Stock Plans terminated), which expire, or for any reason are cancelled or terminated, after that date without being exercised, plus (3) the number of shares subject to restricted stock, restricted stock unit and other full-value awards granted under the Prior Stock Plans that were outstanding and unvested as of September 3, 2014, which are forfeited, terminated, cancelled, or otherwise reacquired after that date without having become vested. As of November 26, 201 6 , 2,201,000 shares were available for award grant purposes under the 2014 Plan, subject to future increases as described in (2) and (3) above and subject to increase as then-outstanding awards expire or terminate without having become vested or exercised, as applicable. Awards under the 2014 Plan may include, but are not limited to, stock options and restricted stock grants. Stock option grants generally vest in equal annual installments over four years and terminate ten years from the date of grant. Restricted stock award vesting is determined on an individual grant basis. Awards of restricted stock under the 2014 Plan will be counted against the available share limit as two and a half shares for every one share actually issued in connection with the award. The Company’s policy is to issue shares from its authorized shares upon the exercise of stock options. The following table summarizes the stock option activity for the six months ended November 26, 2016 (number of shares under option and aggregate intrinsic value in thousands): Number of Shares Under Option Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at May 28, 2016 7,347 $ 16.08 5.41 $ 10,109 Granted, at fair market value 1,212 $ 14.52 Exercised (176) $ 12.12 Forfeited (108) $ 13.96 Expired (140) $ 23.02 Outstanding at November 26, 2016 8,135 $ 16.39 5.63 $ 14,593 Exercisable at November 26, 2016 5,385 $ 17.52 4.03 $ 8,800 Vested and expected to vest at November 26, 2016 7,782 $ 16.47 5.46 $ 14,030 The aggregate intrinsic value in the table above represents the total pretax intrinsic value, which is the difference between the Company’s closing stock price on the last trading day of the second quarter of fiscal 2017 and the exercise price multiplied by the number of shares that would have been received by the option holders if they had exercised their “in the money” options on November 26, 2016. This amount will change based on changes in the fair market value of the Company’s common stock. The aggregate intrinsic value of stock options exercised for the three months ended November 26, 2016 and November 28 , 2015 was $150,000 and $1.3 million, respectively, and for the six months ended November 26, 2016 and November 28, 2015 was $519,000 and $1.8 million, respectively . Stock-Based Compensation Expense As of November 26 , 2016, there was $9.4 million of total unrecognized compensation cost related to un vested employee stock options granted. That cost is expected to be recognized over a weighted-average period of 35 months . Stock-ba sed compensation expense included in selling, general and administrative expenses for the three months ended November 26, 2016 and November 28, 2015 was $ 1.9 million and $1. 4 million, respectively, and for the six months ended November 26, 2016 and November 28, 2015 was $3.2 million and $3.5 million, respectively ; this consisted of stock-based compensation expense related to employee stock options, employee stock purchases made via the Company’s ESPP and restricted stock awards. Included in stock-based compensation expense for the three months ended November 26, 2016 was non-cash stock-based compensation expense of approximately $400,000 related to the accelerated vesting of options previously granted to a senior executive in connection with his departure from the Company. Included in stock-based compensation expense for the six months ended November 28, 2015 was approximately $900,000 related to the accelerated vesting of options previously granted to Donald Murray in connection with his transition from Executive Chairman to Chairman. There were no capitalized share-based compensation costs during the six months ended November 26, 2016 and November 28, 2015 . The Company granted 16,733 shares of restricted stock during the three and six months ended November 26, 2016 and 6,079 shares of restricted stock during the three and six months ended November 28, 2015, respectively. Stock-based compensation expense for existing restricted stock awards for the three months ended November 26, 2016 and November 28, 2015 was $194,000 and $162,000 , respectively, and $349,000 and $286,000 for the six months ended November 26, 2016 and November 28, 2015 , respectively . There were 117,018 unvested restricted shares, with approximately $1.2 million of remaining unrecognized compensation cost, as of November 26, 2016 . The Company recognizes compensation expense for only the portion of stock options and restricted stock that is expected to vest, rather than recording forfeitures when they occur. If the actual number of forfeitures differs from that estimated by management, additional adjustments to compensation expense may be required in future periods. The Company reflects, in its Consolidated Statements of Cash Flows, the tax impact resulting from tax deductions in excess of expense recognized in its Consolidated Statements of Operations as a financing cash flow, which will impact the Company’s future reported cash flows from operating activities. Gross excess tax benefits totaled $6,000 and $149,000 for the six months ended November 26, 2016 and November 28, 2015, respectively. Employee Stock Purchase Plan The Company’s ESPP allows qualified employees (as defined in the ESPP) to purchase designated shares of the Company’s common stock at a price equal to 85 % of the lesser of the fair market value of common stock at the beginning or end of each semi-annual stock purchase period. The ESPP’s term expires October 16, 2024. A total of 5,900,000 shares of common stock may be issued under the ESPP. T here were 1,103,000 shares of common stock available for issuance under the ESPP as of November 26, 2016. The Company issued 174,000 and 325,000 shares of common stock pursuant to the ESPP during the six m onths ended November 26, 2016 and the year ended May 28 , 201 6 , respectively. |