Stock-based Compensation Plans (Tables)

12 Months Ended

Aug. 31, 2012

Schedule of Share Based Compensation Stock Options Activity

A summary of the stock option activity for the year ended August 31, 2012 is as follows:

	Number of Shares			Option Price Range		Weighted Average Exercise Price		Weighted Average Remaining Term (in years)		Aggregate Intrinsic Value
Outstanding Balance, August 31, 2011		1,333,885		$	4.66 — 21.73	$	14.52
Granted		760,500			5.29 —   5.65		5.61
Exercised		—
Cancelled		(269,469	)		7.73 — 17.50		13.61
Outstanding Balance, August 31, 2012		1,824,916			4.66 — 21.73		10.94		3.97	$	1,360,000
Options Exercisable at August 31, 2012		1,050,916		$	4.66 — 21.73	$	14.88		2.19	$	40,500

Schedule of Share Based Payment Award Stock Options Valuation Assumptions

years. The Company estimated the fair value of stock options granted using the following weighted-average assumptions and resulting in the following weighted-average grant date fair value:

	2012	2011
Expected volatility	68%	71%
Expected life (years)	4.9	4.3
Interest rate	0.5 - 1.1%	1.1 - 2.8%
Dividend yield	0%	0%
Weighted-average fair values	$3.13	$3.62

Schedule of Share-Based Compensation, Restricted Stock Award Activity

the fair value of Penford’s common stock at the grant date. The following table summarizes the restricted stock award activity for the twelve months ended August 31, 2012 as follows:

	Number of Shares			Weighted Average Grant Date Fair Value
Nonvested at August 31, 2011		84,232		$	14.67
Granted		31,851			5.65
Vested		(54,367	)		19.29
Cancelled		—
Nonvested at August 31, 2012		61,716		$	5.94

Schedule of Employee Service Share-Based Compensation, Allocation of Recognized Period Costs

equals the vesting period. The following table summarizes the total stock-based compensation cost for fiscal years 2012, 2011 and 2010 and the effect on the Company’s consolidated statements of operations (dollars in thousands):

	2012			2011			2010
Cost of sales	$	48		$	130		$	170
Operating expenses		1,324			949			1,413
Research and development expenses		15			38			28
Income (loss) from discontinued operations		—			—			(25	)
Total stock-based compensation expense	$	1,387		$	1,117		$	1,586
Income tax benefit		(527	)		(424	)		(603	)
Total stock-based compensation expense, net of tax	$	860		$	693		$	983