Share-Based Compensation Plans

12 Months Ended

Aug. 31, 2011

Share-Based Compensation Plan [Abstract]

SHARE-BASED COMPENSATION PLANS

NOTE 13. SHARE-BASED COMPENSATION PLANS

Share-Based Compensation The Company recognized share-based compensation expense of $12.9 million, $13.1 million and $17.5 million as a component of selling, general and administrative expenses for the years ended August 31, 2011, 2010 and 2009, respectively. At August 31, 2011, the Company had $20.4 million of total unrecognized pre-tax compensation cost related to non-vested share-based compensation arrangements, which is expected to be recognized over 2.8 years.

Stock Incentive Plans The 2006 Long-Term Equity Incentive Plan (“2006 Plan”) provides for grants of stock options, SARs, restricted stock and performance-based restricted units (“PSUs”). As of August 31, 2011, the Company has 5,454,658 shares available for future grants.

The following table summarizes the total stock-based awards granted:

	Stock		Restricted Stock		Performance
	Options/SARs		Awards/Units		Awards
2011 Grants		112,000		690,180		686,548
2010 Grants		126,000		961,518		340,000
2009 Grants		126,000		—		403,000

Grants of stock options, stock appreciation rights (“SARs”) and restricted stock units generally vest over a three-year period in increments of one-third per year. One of the restricted stock unit grants in 2010 vests over a four-year period in increments of one-half at the end of two years and one-half at the end of four years. Prior to vesting, restricted stock unit recipients do not receive an amount equivalent to any dividend declared on the Company’s common stock. Options and SARs expire seven years after the grant date. All awards are valued at the fair market value at the date of grant.

During 2011, the Compensation Committee (the “Committee”) of the Board of Directors approved a grant of performance stock units (“PSUs”). The PSUs will vest upon the achievement of certain target levels of the performance goals and objectives of the Company over the performance period of approximately three years. The actual number of performance awards granted will be based on the level of achievement. Upon achievement of any of the performance goals, the awards will be paid out 50% in shares of common stock of the Company and 50% in cash. The Company has accounted for the cash component of the performance award as a liability award and the value is adjusted to the current share price of common stock of the Company at each reporting period. Prior to vesting, the performance stock unit recipients do not receive an amount equivalent to any dividend declared on the Company’s common stock.

During 2010, the Committee approved an award of PSUs. The awards vest upon the following performance conditions: (i) 50% of the PSUs shall vest if the Company ranks at the 50th percentile on a total stockholders return basis as compared to its peer group with the total stockholder return based on the average of the closing prices on the principal market for each trading day for the month of June 2010 versus the average of the closing prices on the principal market for each trading day for the month of June 2013; and (ii) 100% of the performance units shall vest if the Company ranks at or greater than the 60th percentile on a total stockholder return basis as compared to its peer group with the total stockholder return based on the average of the closing prices on the principal market for each trading day for the month of June 2010 versus the average of the closing prices on the principal market for each trading day for the month of June 2013. Vesting will be calculated on a straight line interpolation basis for a rank on a total stockholder return basis as compared to our Peer Group between the 50th percentile (at a vesting percentage of 50%) and 60th percentile (with a vesting percentage of 100% with the total stockholder return based on the average of the closing prices for the month of June 2010 versus the average of the closing prices for the month of June 2013. The determination of whether any vesting criteria have been met is to be made by the Committee. The unvested units will be forfeited on the earlier of the date of the participant’s termination of service or June 30, 2013.

During 2009, the Committee approved an award of PSUs. The awards vest upon the following performance conditions: (i) for 20 consecutive trading days between the date of grant and May 19, 2012, the closing price of the Company’s common stock is at least $30 per share and the Company ranks at or greater than the 50th percentile on a total stockholder return basis as compared to its peer group with total stockholder return being based on the average of the closing prices for the month of December 2008 versus the average of the closing prices for the month of December 2011; or (ii) for 20 consecutive trading days between the date of grant and May 19, 2012, the closing price of the Company’s common stock is at least $24 per share and the Company ranks at or greater than the 80th percentile on a total stockholder return basis as compared to its peer group with the total stockholder return based on the average of the closing prices for the month of December 2008 versus the average of the closing prices the month of December 2011. The determination of whether any vesting criteria have been met is to be made by the Committee. The unvested units will be forfeited on the earlier of the date of the participant’s termination of service or May 19, 2012.

The 1999 Non-Employee Director Stock Option Plan (“1999 Plan”) provides for grants of either non-qualified stock options, restricted stock or restricted stock units. Awards granted to non-employee directors under the 1999 Plan vest over a two-year period. Prior to vesting, restricted stock award recipients receive an amount equivalent to any dividend declared on the Company’s common stock.

Combined information for shares subject to options and SARs for the plans were as follows:

						Weighted
				Weighted		Average
				Average		Remaining
				Exercise		Contractual Life		Aggregate
	Number			Price		(Years)		Intrinsic Value
Outstanding at August 31, 2010		3,922,016		$	23.67
Granted		112,000			16.83
Exercised		(854,023	)		8.03
Forfeited/Expired		(372,495	)		28.96
Outstanding at August 31, 2011		2,807,498		$	27.45		2.8	$	94,500
Exercisable at August 31, 2011		2,639,498		$	28.19		2.8	$	94,500

The total intrinsic value of options and SARs exercised during 2011, 2010 and 2009 was $7.4 million, $9.8 million and $5.6 million, respectively.

The Black-Scholes pricing model was used for stock options and Stock Appreciation rights (“SARs”) and the following weighted average assumptions were used for grants in the years ended August 31:

	2011			2010			2009
Risk-free interest rate		0.59	%		0.86	%		1.24	%
Expected life, years		2.0			2.0			3.9
Expected volatility		56	%		80	%		60	%
Expected dividend yield		2.85	%		3.42	%		1.1	%
Weighted average grant-date fair value per share	$	4.63		$	5.43		$	4.69

Information for restricted stock awards and PSUs (excluding the cash component of PSUs) is as follows:

				Weighted Average
				Grant-Date
	Shares			Fair Value
Outstanding at August 31, 2010		1,649,985		$	12.54
Granted		1,033,454		$	15.55
Vested		(162,042	)		18.06
Forfeited		(127,257	)		13.01
Outstanding at August 31, 2011		2,394,140		$	13.44

The weighted-average grant-date fair value per share of restricted stock awards and PSUs was $12.89 and $8.89 for 2010 and 2009, respectively. The total fair value of shares vested during 2011, 2010 and 2009 was $2.9 million, $3.2 million and $6.3 million, respectively.

The binomial model was used for performance-based awards granted in 2010 and 2009, respectively:

	2010			2009
Risk-free interest rate		1.31	%		1.37	%
Expected life, years		3.0			2.6
Expected volatility		71	%		69	%
Expected dividend yield		—			2.9	%

Stock Purchase Plan Almost all U.S. resident employees with one year of service at the beginning of each calendar year may participate in the Company’s employee stock purchase plan. Each eligible employee may purchase up to 400 shares annually. The Board of Directors establishes the purchase discount from the market price. The discount was 15% for the years ended August 31, 2011 and 2010 and 25% for the year ended August 31, 2009. Yearly activity of the stock purchase plan was as follows:

	2011		2010		2009
Shares subscribed		339,620		526,890		1,234,080
Price per share	$	14.34	$	13.63	$	7.94
Shares purchased		357,180		980,940		7,530
Price per share	$	13.63	$	7.94	$	9.90
Shares available for future issuance		4,519,374