Accounting for Sharebased Compensation | 6 Months Ended |
31-May-14 |
Disclosure Of Share Based Compensation [Abstract] | ' |
Share Based Compensation Note | ' |
Note 3: Accounting for Share-Based Compensation |
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Overview: We have various share-based compensation programs, which provide for equity awards including stock options, restricted stock shares, restricted stock units and deferred compensation. These equity awards fall under several plans and are described in detail in our Annual Report on Form 10-K for the year ended November 30, 2013. Starting in 2014 we will no longer grant restricted stock shares. |
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Grant-Date Fair Value: We use the Black-Scholes option-pricing model to calculate the grant-date fair value of an award. The fair value of options granted during the 13 weeks and 26 weeks ended May 31, 2014 and June 1, 2013 were calculated using the following weighted average assumptions: |
| | 13 Weeks Ended | | 26 Weeks Ended |
| | 31-May-14 | | 1-Jun-13 | | 31-May-14 | | 1-Jun-13 |
Expected life (in years) | | 4.75 | | 4.75 | | 4.75 | | 4.75 |
Weighted-average expected volatility | | 32.70% | | 47.65% | | 34.17% | | 48.00% |
Expected volatility | | 32.70% | | 47.65% | | 32.70% - 37.06% | | 47.65% - 48.02% |
Risk-free interest rate | | 1.64% | | 0.69% | | 1.51% | | 0.73% |
Expected dividend yield | | 0.84% | | 1.04% | | 0.82% | | 0.87% |
Weighted-average fair value of grants | | $13.33 | | $14.27 | | $14.21 | | $15.09 |
Expected life – We use historical employee exercise and option expiration data to estimate the expected life assumption for the Black-Scholes grant-date valuation. We believe that this historical data is currently the best estimate of the expected term of a new option. We use a weighted-average expected life for all awards. |
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Expected volatility – Volatility is calculated using our historical volatility for the same period of time as the expected life. We have no reason to believe that our future volatility will differ materially from the past. |
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Risk-free interest rate – The rate is based on the U.S. Treasury yield curve in effect at the time of the grant for the same period of time as the expected life. |
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Expected dividend yield – The calculation is based on the total expected annual dividend payout divided by the average stock price. |
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Expense Recognition: We use the straight-line attribution method to recognize share-based compensation expense for option awards with graded vesting and restricted stock share and restricted stock units with graded and cliff vesting. The amount of share-based compensation expense recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. |
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Total share-based compensation expense of $3,163 and $2,895 was included in our Condensed Consolidated Statements of Income for the 13 weeks ended May 31, 2014 and June 1, 2013, respectively. Total share-based compensation expense of $7,148 and $6,215 was included in our Condensed Consolidated Statements of Income for the 26 weeks ended May 31, 2014 and June 1, 2013, respectively. All share-based compensation expense was recorded as selling, general and administrative expense. For the 13 weeks ended May 31, 2014 and June 1, 2013 there was $837 and $225 of excess tax benefit recognized, respectively. For the 26 weeks ended May 31, 2014 and June 1, 2013 there was $2,450 and $2,029 of excess tax benefit recognized, respectively. |
As of May 31, 2014, there was $9,717 of unrecognized compensation costs related to unvested stock option awards, which is expected to be recognized over a weighted-average period of 1.3 years. Unrecognized compensation costs related to unvested restricted stock shares was $5,164 which is expected to be recognized over a weighted-average period of 1.5 years. Unrecognized compensation costs related to unvested restricted stock units was $6,249 which is expected to be recognized over a weighted-average period of 1.4 years. |
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Share-based Activity |
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A summary of option activity as of May 31, 2014 and changes during the 26 weeks then ended is presented below: |
| | | | | | Weighted- | | |
| | | | | | Average | | |
| | | Options | | | Exercise Price | | |
| Outstanding at November 30, 2013 | | 2,429,961 | | $ | 25.74 | | |
| Granted | | 415,079 | | | 48.9 | | |
| Exercised | | -215,641 | | | 21.57 | | |
| Forfeited or cancelled | | -19,025 | | | 33.81 | | |
| Outstanding at May 31, 2014 | | 2,610,374 | | $ | 29.71 | | |
The total fair values of options granted during the 13 weeks ended May 31, 2014 and June 1, 2013 were $106 and $277, respectively. Total intrinsic values of options exercised during the 13 weeks ended May 31, 2014 and June 1, 2013 were $3,119 and $533, respectively. Intrinsic value is the difference between our closing stock price on the respective trading day and the exercise price, multiplied by the number of options exercised. The total fair values of options granted during the 26 weeks ended May 31, 2014 and June 1, 2013 were $5,899 and $6,823, respectively. Total intrinsic values of options exercised during the 26 weeks ended May 31, 2014 and June 1, 2013 were $5,792 and $4,770, respectively. Proceeds received from option exercises during the 13 weeks ended May 31, 2014 and June 1, 2013 were $2,646 and $597, respectively and $4,651 and $4,371 during the 26 weeks ended May 31, 2014 and June 1, 2013, respectively. |
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A summary of nonvested restricted stock as of May 31, 2014 and changes during the 26 weeks then ended is presented below: |
| | | | | | | | Weighted- |
| | | | | | Weighted- | | Average |
| | | | | | Average | | Remaining |
| | | | | | Grant | | Contractual |
| | | | | | Date Fair | | Life |
| | Units | Shares | Total | | Value | | (in Years) |
Nonvested at November 30, 2013 | | 135,231 | 312,445 | 447,676 | $ | 33.76 | | 1.2 |
Granted | | 124,387 | - | 124,387 | | 48.89 | | 1.7 |
Vested | | -65,911 | -111,291 | -177,202 | | 48.2 | | - |
Forfeited | | -335 | -6,161 | -6,496 | | 35.43 | | 1.3 |
Nonvested at May 31, 2014 | | 193,372 | 194,993 | 388,365 | $ | 40.49 | | 1.4 |
Total fair values of restricted stock vested during the 13 weeks ended May 31, 2014 and June 1, 2013 were $251 and $278, respectively. Total fair values of restricted stock vested during the 26 weeks ended May 31, 2014 and June 1, 2013 were $8,541 and $6,550, respectively. The total fair value of nonvested restricted stock at May 31, 2014 was $11,413. |
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We repurchased 2,249 and 1,972 restricted stock shares during the 13 weeks ended May 31, 2014 and June 1, 2013, respectively and 66,312 and 61,624 during the 26 weeks ended May 31, 2014 and June 1, 2013, respectively The repurchases relate to statutory minimum tax withholding. |
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We have a Directors’ Deferred Compensation plan that allows non-employee directors to defer all or a portion of their directors’ compensation in a number of investment choices, including units representing shares of our common stock. We also have a Key Employee Deferred Compensation Plan that allows key employees to defer a portion of their eligible compensation in a number of investment choices, including units, representing shares of our common stock. We provide a 10 percent match on deferred compensation invested into units, representing shares of our common stock. A summary of deferred compensation units as of May 31, 2014, and changes during the 26 weeks then ended is presented below: |
Deferred compensation units are fully vested at the date of contribution. |
| | Non-employee | | | | | | |
| | Directors | Employees | Total | | | | |
Units outstanding November 30, 2013 | | 312,680 | 61,288 | 373,968 | | | | |
Participant contributions | | 6,556 | 1,212 | 7,768 | | | | |
Company match contributions | | 656 | 121 | 777 | | | | |
Payouts | | -298 | -7,257 | -7,555 | | | | |
Units outstanding May 31, 2014 | | 319,594 | 55,364 | 374,958 | | | | |