STOCK BASED COMPENSATION

12 Months Ended

Aug. 31, 2020

NOTE 8 – STOCK BASED COMPENSATION

Stock Based Compensation – The Company utilizes three types of equity awards: restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and performance based restricted stock units (“PSUs”). Refer “Item 8. Financial Statements and Supplementary Data: Notes to Consolidated Financial Statements, Note 2 - Summary of Significant Accounting Policies. “

The Company adopted the 2013 Equity Incentive Award Plan (the "2013 Plan") for the benefit of its eligible employees, consultants and non-employee directors on January 22, 2013. The 2013 Plan provides for awards covering up to (1) 600,000 shares of common stock plus (2) the number of shares that remained available for issuance as of January 22, 2013 under three equity participation plans previously maintained by the Company. The number of shares reserved for issuance under the 2013 Plan increases during the term of the plan by the number of shares relating to awards outstanding under the 2013 Plan or any of the prior plans that expire, or are forfeited, terminated, canceled or repurchased, or are settled in cash in lieu of shares. However, in no event will more than an aggregate of 713,235 shares of the Company’s common stock be issued under the 2013 Plan. The following table summarizes the shares authorized and shares available for future grants:



		Shares available to grant
	Shares authorized for issuance as of August 31, 2020	August 31,		August 31,
	(including shares originally authorized for issuance under prior plans)	2020		2019
2013 Plan	1,057,126		297,366		464,424

The following table summarizes the components of the stock-based compensation expense for the twelve-month periods ended August 31, 2020, 2019 and 2018 (in thousands), which are included in general and administrative expense and warehouse club and other operations in the consolidated statements of income:



	Years Ended August 31,
	2020		2019		2018
Restricted stock awards	$	8,747	$	11,477	$	7,476
Restricted stock units		3,011		2,820		2,742
Performance-based restricted stock units		2,059		764		—
Stock-based compensation expense	$	13,817	$	15,061	$	10,218

In October 2018, the Company’s then Chief Executive Officer (“former C.E.O.”), resigned by mutual agreement with the Board of Directors. In connection with his departure, the Company recorded among other things approximately $3.3 million of non-cash charges related to the acceleration of certain equity restricted stock awards.

The following tables summarize other information related to stock-based compensation:



	Balance as of
	August 31,		August 31,		August 31,
	2020		2019		2018
Remaining unrecognized compensation cost (in thousands)	$	21,720	$	21,116	$	29,473
Weighted average period of time over which this cost will be recognized (years)		2		3		3



	Years Ended
	August 31,		August 31,		August 31,
	2020		2019		2018
Excess tax benefit (deficiency) on stock-based compensation (in thousands)	$	(936)	$	(1,829)	$	530	⁽¹⁾

⁽¹⁾Beginning in the first quarter of fiscal 2018, the Company began recording the tax savings resulting from tax deductions in excess of expense for stock-based compensation and the tax deficiencies resulting from stock-based compensation in excess of the related tax deduction as income tax expense or benefit, based on the adoption of ASU 2016-09.

The restricted stock awards and units vest from a one year to ten year period and the unvested portion of the award is forfeited if the employee or non-employee director leaves the Company before the vesting period is completed. Restricted stock awards, restricted stock units, and performance-based restricted stock units activity for the twelve-months ended August 31, 2020, 2019 and 2018 was as follows:



	Years Ended
	August 31,		August 31,		August 31,
	2020		2019		2018
Grants outstanding at beginning of period		362,826		385,417		404,368
Granted		266,759		193,489		132,031
Forfeited		(43,198)		(16,127)		(23,119)
Vested		(170,518)		(199,953)		(127,863)
Grants outstanding at end of period		415,869		362,826		385,417

The following table summarizes the weighted average per share grant date fair value for restricted stock awards, restricted stock units, and performance based restricted stock units for fiscal years 2020, 2019 and 2018:



	Years Ended
	August 31,		August 31,		August 31,
Weighted Average Grant Date Fair Value	2020		2019		2018
RSAs, RSUs, and PSUs granted	$	64.57	$	65.11	$	84.83
RSAs, RSUs, and PSUs vested	$	72.82	$	79.28	$	79.36
RSAs, RSUs, and PSUs forfeited	$	76.81	$	75.02	$	73.27

The following table summarizes the total fair market value of restricted stock awards, restricted stock units, and performance based restricted stock units vested for the period (in thousands):



	Years Ended
	August 31,		August 31,		August 31,
	2020		2019		2018
Total fair market value of RSAs, RSUs, and PSUs vested (in thousands)	$	10,914	$	12,302	$	10,886

At the vesting dates for restricted stock awards to employees, the Company repurchases a portion of the shares that have vested at the prior day's closing price per share, with the funds used to pay the employees' minimum statutory tax withholding requirements related to the vesting of restricted stock awards. The Company expects to continue this practice going forward. The Company does not have a stock repurchase program.

Shares of common stock repurchased by the Company are recorded at cost as treasury stock and result in the reduction of stockholders’ equity in the Company’s consolidated balance sheets. The Company may reissue these treasury shares.

The following table summarizes the shares repurchased during fiscal years 2020, 2019 and 2018:



	Years Ended
	August 31,		August 31,		August 31,
	2020		2019		2018
Shares repurchased		56,503		75,462		37,414
Cost of repurchase of shares (in thousands)	$	3,651	$	4,604	$	3,183

The Company reissues treasury shares as part of its stock-based compensation programs. The following table summarizes the treasury shares reissued during the period:



	Years Ended
	August 31,		August 31,		August 31,
	2020		2019		2018
Reissued treasury shares		234,370		63,130		—