Equity Incentive Plan

6 Months Ended

Nov. 30, 2013

Equity Incentive Plan

Note 4: Equity Incentive Plan

Our 2005 Equity Incentive Plan (the “Equity Incentive Plan”) authorizes our Board of Directors to grant incentive and non-statutory stock option grants, stock appreciation rights, restricted stock awards, restricted stock units, performance unit awards and performance share awards covering a maximum of 1,000 shares of our common stock. The Equity Incentive Plan replaced our prior stock option plans, under which there are no outstanding options. Pursuant to the Equity Incentive Plan, we have granted incentive and non-statutory options to directors, officers and key employees at prices not less than 100% of the fair market value on the day of grant. In addition, we have granted restricted stock and restricted stock units to directors, officers and key employees. The Equity Incentive Plan provides for a variety of vesting dates. All outstanding options expired in October 2011.

Restricted Stock Units

A restricted stock unit represents the right to receive one share of our common stock, provided that the vesting conditions are satisfied. The following table represents restricted stock unit activity for the six months ended November 30, 2013:

	Restricted Stock Units			Weighted – Average Grant Date Fair Value
Nonvested at June 1, 2013		154		$	16.13
Granted		65			18.20
Vested		(90	)		15.56
Forfeited/canceled		(1	)		14.51
Nonvested at November 30, 2013		128		$	17.60

We granted 11 and 65 restricted stock units during the three and six months, respectively, ended November 30, 2013, and 14 and 73 restricted stock units during the three and six months, respectively, ended November 30, 2012. Under the terms of our RSU agreements, unvested RSU awards contain forfeitable rights to dividends. Because the dividends are forfeitable, they are defined as non-participating securities. As of November 30, 2013, we have unrecognized share-based compensation cost of approximately $1,782 associated with restricted stock unit awards. This cost is expected to be recognized over a weighted-average period of approximately 1.9 years.

We had 326 and 247 vested restricted stock units as of November 30, 2013 and 2012, respectively, which receive dividends following vesting and are convertible to common shares five years after the grant date.

Accounting for Share Based Payments

Accounting guidance requires all share-based payments to employees, including grants of employee stock options, restricted stock and restricted stock units, to be recognized as compensation expense in the consolidated financial statements based on their fair values. Compensation expense is recognized over the period that an employee provides service in exchange for the award, approximately 3 years.

Forfeitures are estimated at the date of grant based on historical experience. We use the market price of our common stock on the date of grant to calculate the fair value of each grant of restricted stock and restricted stock units.

We recorded $381 and $724 of stock-based compensation as part of selling, general and administrative expenses for the three and six months ended November 30, 2013, respectively, compared to $350 and $639 for the three and six months ended November 30, 2012, respectively.

We receive a tax deduction, included as an excess tax benefit, for dividends paid on vested restricted stock units where the underlying shares have not been issued. Excess tax benefits are realized tax benefits from tax deductions for such dividends. The total excess tax benefit realized from dividend payments for vested restricted stock units for the six months ended November 30, 2013 and 2012 was $131 and $113, respectively.