7. Stockholders’ Equity

Per Share Results

Basic and diluted per share results were based on the following:


	For the Three Months Ended				For the Six Months Ended
	May 31, 2016		May 31, 2015		May 31, 2016		May 31, 2015

Net loss	$	(379)	$	(234)	$	(714)	$	(942)

Weighted average shares outstanding for computation of basic per share results		5,150,000		5,150,000		5,151,000		5,150,000
Incremental shares from assumed exercise of Griffin stock options (a)		—		—		—		—
Adjusted weighted average shares for computation of diluted per share results		5,150,000		5,150,000		5,151,000		5,150,000

(a)

Incremental shares from the assumed exercise of Griffin stock options are not included in periods where the inclusion of such shares would be anti-dilutive. The incremental shares from the assumed exercise of stock options for the three months and six months ended May 31, 2016 would have been 2,000 for each period. The incremental shares from the assumed exercise of stock options for the three months and six months ended May 31, 2015 would have been 23,000 and 19,000, respectively.

Griffin Stock Option Plan

Stock options are granted by Griffin under the Griffin Industrial Realty, Inc. 2009 Stock Option Plan (the “2009 Stock Option Plan”). Options granted under the 2009 Stock Option Plan may be either incentive stock options or non-qualified stock options issued at fair market value on the date approved by Griffin’s Compensation Committee. Vesting of all of Griffin's stock options is solely based upon service requirements and does not contain market or performance conditions. Stock options issued will expire ten years from the grant date. In accordance with the 2009 Stock Option Plan, stock options issued to non-employee directors upon their initial election to the board of directors are fully exercisable immediately upon the date of the option grant. Stock options issued to non-employee directors upon their re-election to the board of directors vest on the second anniversary from the date of grant. Stock options issued to employees vest in equal installments on the third, fourth and fifth anniversaries from the date of grant. None of the stock options outstanding at May 31, 2016 may be exercised as stock appreciation rights.

The following options were granted by Griffin under the 2009 Stock Option Plan to non-employee directors either upon their initial election or their re-election to Griffin’s Board of Directors and to Griffin employees:


	For the Six Months Ended
	May 31, 2016			May 31, 2015
		Fair Value per			Fair Value per
	Number of	Option at		Number of	Option at
	Shares	Grant Date		Shares	Grant Date

Employees	101,450	$	7.51 - 11.65	-	$	-
Non-employee directors	8,409	$	11.30	8,282	$	14.39
	109,859			8,282

The fair values of all options granted were estimated as of the grant date using the Black-Scholes option-pricing model. Assumptions used in determining the fair value of the stock options granted in the 2016 and 2015 six month periods were as follows:


	For the Six Months Ended
	May 31, 2016	May 31, 2015

Expected volatility	32.9% to 41.1%	40.8%
Risk free interest rates	1.2% to 1.5%	2.0%
Expected option term (in years)	5 to 8.5	8.5
Annual dividend yield	0.9%	0.7%


Number of option holders at May 31, 2016		31

Compensation expense and related tax benefits for stock options were as follows:


	For the Three Months Ended				For the Six Months Ended
	May 31, 2016		May 31, 2015		May 31, 2016		May 31, 2015

Net compensation expense	$	43	$	69	$	114	$	162

Net related tax benefit	$	12	$	23	$	24	$	41

For all periods presented, the forfeiture rate for directors was 0%, forfeiture rates for executives ranged from 17.9% to 22.6% and forfeiture rates for employees ranged from 38.3% to 41.1%. These rates were utilized based on the historical activity of the grantees.

As of May 31, 2016, the unrecognized compensation expense related to nonvested stock options that will be recognized during future periods is as follows:


Balance of Fiscal 2016	$	168
Fiscal 2017	$	314
Fiscal 2018	$	279
Fiscal 2019	$	198
Fiscal 2020	$	102
Fiscal 2021	$	28

A summary of the activity under the 2009 Griffin Stock Option Plan is as follows:


	For the Six Months Ended
	May 31, 2016			May 31, 2015
			Weighted			Weighted
			Avg.			Avg.
	Number of		Exercise	Number of		Exercise
	Shares		Price	Shares		Price

Outstanding at beginning of period	225,727	$	30.47	222,001	$	30.35
Granted	109,859	$	26.83	8,282	$	31.38
Exercised	—	$	—	(3,134)	$	25.53
Forfeited	(5,266)	$	30.38	—	$	—
Outstanding at end of period	330,320	$	29.26	227,149	$	30.45


				Weighted Avg.
				Remaining
Range of Exercise Prices for	Outstanding at	Weighted Avg.		Contractual Life	Total Intrinsic
Vested and Nonvested Options	May 31, 2016	Exercise Price		(in years)	Value

$23.00 - $28.00	124,793	$	26.67	9.4	$	676
$28.00 - $32.00	122,452	$	29.02	4.9		375
$32.00 - $39.00	83,075	$	33.52	2.4		—
	330,320	$	29.26	6.0	$	1,051

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss, net of tax, is comprised of the following:


	For the Six Months Ended May 31, 2016
			Unrealized gain
	Unrealized loss on		on investment in
	cash flow hedges		Centaur Media		Total

Balance November 30, 2015	$	(1,744)	$	659	$	(1,085)
Other comprehensive loss before reclassifications		(1,115)		(339)		(1,454)
Amounts reclassified		427		—		427
Net activity for other comprehensive loss		(688)		(339)		(1,027)
Balance May 31, 2016	$	(2,432)	$	320	$	(2,112)


	For the Six Months Ended May 31, 2015
			Unrealized gain
	Unrealized loss on		on investment in
	cash flow hedges		Centaur Media		Total

Balance November 30, 2014	$	(1,464)	$	629	$	(835)
Other comprehensive (loss) income before reclassifications		(458)		291		(167)
Amounts reclassified		368		—		368
Net activity for other comprehensive loss		(90)		291		201
Balance May 31, 2015	$	(1,554)	$	920	$	(634)

The components of other comprehensive loss are as follows:


	For the Three Months Ended
	May 31, 2016						May 31, 2015
			Tax						Tax
			(Expense)		Net-of				(Expense)		Net-of
	Pre-Tax		Benefit		Tax		Pre-Tax		Benefit		Tax
Reclassifications included in net loss:
Loss on cash flow hedges (interest expense)	$	339	$	(125)	$	214	$	303	$	(112)	$	191
Total reclassifications included in net loss		339		(125)		214		303		(112)		191

Mark to market adjustment on Centaur Media for an increase (decrease) in the foreign currency exchange rate		55		(19)		36		(23)		8		(15)
Mark to market adjustment on Centaur Media for a (decrease) increase in fair value		(183)		64		(119)		448		(157)		291
Increase (decrease) in fair value adjustments on Griffin’s cash flow hedges		43		(17)		26		(209)		77		(132)

Total change in other comprehensive income		(85)		28		(57)		216		(72)		144

Other comprehensive income	$	254	$	(97)	$	157	$	519	$	(184)	$	335


	For the Six Months Ended
	May 31, 2016						May 31, 2015
			Tax						Tax
			(Expense)		Net-of				(Expense)		Net-of
	Pre-Tax		Benefit		Tax		Pre-Tax		Benefit		Tax
Reclassifications included in net loss:
Loss on cash flow hedges (interest expense)	$	677	$	(250)	$	427	$	584	$	(216)	$	368
Total reclassifications included in net loss		677		(250)		427		584		(216)		368

Mark to market adjustment on Centaur Media for a decrease in the foreign currency exchange rate		(73)		26		(47)		(49)		17		(32)
Mark to market adjustment on Centaur Media for a (decrease) increase in fair value		(448)		156		(292)		498		(175)		323
Decrease in fair value adjustments on Griffin’s cash flow hedges		(1,769)		654		(1,115)		(727)		269		(458)

Total change in other comprehensive (loss) income		(2,290)		836		(1,454)		(278)		111		(167)

Other comprehensive (loss) income	$	(1,613)	$	586	$	(1,027)	$	306	$	(105)	$	201

Stock Repurchases

On March 31, 2016, Griffin’s Board of Directors authorized a stock repurchase program whereby Griffin may repurchase up to $5,000 in outstanding shares of its common stock over a twelve month period in privately negotiated transactions. This repurchase program does not obligate Griffin to repurchase any specific number of shares, and may be suspended at any time at management’s discretion. On May 27, 2016, Griffin repurchased 60,000 shares of its outstanding common stock for approximately $1,951. The liability for this repurchase is included in accounts payable as of May 31, 2016, as the transaction was settled on June 2, 2016.

Cash Dividend

Griffin did not declare a cash dividend in the 2016 or 2015 six month periods. During the 2016 first quarter, Griffin paid $1,546 for the cash dividend declared in the 2015 fourth quarter. During the 2015 first quarter, Griffin paid $1,030 for the cash dividend declared in the 2014 fourth quarter.