STOCK-BASED COMPENSATION

We determined the fair value of stock options and restricted stock issued under our long term incentive plans as of the grant date. The fair value of the stock options was estimated on the date of the grant using a Black-Scholes option valuation model that used various assumptions. The risk free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant. Expected life (estimated period of time outstanding) of a grant was determined by reference to the vesting schedule, past exercise behavior and comparison with other reporting companies. The dividend rate at the date of grant was used as the best estimate of future dividends. Expected volatility was determined by calculating the standard deviation of our stock price for the five years immediately prior to the grant date. This period of time closely resembles the expected term. All stock options issued under our plans have an exercise price equal to the closing market price of our Common Stock on the date of grant. All options currently outstanding have a term of ten years.

STOCK OPTIONS

Our 1995 Long Term Incentive Plan (“1995 Plan”) provided for grants of both incentive and non-qualified stock options and restricted stock. Stock options granted under the 1995 Plan generally vest 25% two years after the grant date and in each of the three following anniversaries of the grant date. All shares of stock issued upon option exercises under this plan were from authorized but unissued stock; all shares of restricted stock issued were from treasury stock. There are no shares available for future grants under this plan.

The Oil-Dri Corporation of America 2006 Long Term Incentive Plan (“2006 Plan”) permits the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other stock-based and cash-based awards. Our employees and outside directors are eligible to receive grants under the 2006 Plan. The total number of shares of stock subject to grants under the 2006 Plan may not exceed 937,500. Stock options have been granted to our outside directors with a vesting period of one year and stock options granted to employees generally vest 25% two years after the grant date and in each of the three following anniversaries of the grant date. In addition, shares of restricted stock have been issued under the 2006 Plan as described in the restricted stock section below. As of July 31, 2012, there were 623,000 shares available for future grants under this plan.

The Oil-Dri Corporation of America Outside Director Stock Plan (the “Directors’ Plan”) provides for grants of stock options to directors, who are considered employees. Stock options have been granted to our directors with a one year vesting period. There are no shares available for future grants under this plan. All shares of stock issued under the Directors’ Plan were from treasury stock.

A summary of stock option transactions under the plans is shown below.



	Number of Shares (in thousands)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)
Options outstanding at July 31, 2009	505		$	9.14	3.8	$	3,363
Options exercisable at July 31, 2009	473		$	8.74	3.6	$	3,321
Options non-vested at July 31, 2009	32		$	15.03
Exercised	(176	)	$	7.75		$	1,881
Expired	(2	)	$	11.65
Options outstanding at July 31, 2010	327		$	9.87	3.2	$	3,934
Options exercisable at July 31, 2010	317		$	9.64	3.1	$	3,885
Options non-vested at July 31, 2010	10		$	17.00
Exercised	(138	)	$	8.19		$	1,720
Options outstanding at July 31, 2011	189		$	11.10	2.8	$	1,882
Options exercisable at July 31, 2011	184		$	10.94	2.8	$	1,793
Options non-vested at July 31, 2011	5		$	17.00
Exercised	42		$	8.34		$	515
Options outstanding at July 31, 2012	147		$	11.89	2.2	$	1,473
Options exercisable at July 31, 2012	147		$	11.89	2.2	$	1,473
Options non-vested at July 31, 2012	—		$	—

The amount of cash received from the exercise of options during the fiscal year ended July 31, 2012 was approximately $866,000 and the related tax benefit was approximately $234,000. The amount of cash received from the exercise of options during the fiscal year ended July 31, 2011 was approximately $2,867,000 and the related tax benefit was approximately $831,000. The amount of cash received from the exercise of options during the fiscal year ended July 31, 2010 was approximately $3,242,000 and the related tax benefit was approximately $849,000.

The following table summarizes information related to stock options outstanding and exercisable at July 31, 2012. All outstanding stock options were exercisable as of July 31, 2012.



					Options Outstanding And Exercisable By Price Range As Of July 31, 2012
					Outstanding and Exercisable	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price
Range of Exercise Prices					(in thousands)	(Years)	Weighted Average Exercise Price
$	9.00	-	$	10.50	77	1.07	$	9.34
$	10.51	-	$	12.00	—	—	$	—
$	12.01	-	$	13.50	23	2.19	$	13.09
$	13.51	-	$	15.00	25	3.86	$	14.82
$	15.01	-	$	16.50	12	3.62	$	15.37
$	16.51	-	$	17.00	10	4.31	$	17.00
$	9.00	-	$	17.00	147	2.16	$	11.89

We recognized the related compensation expense over the period from the date of grant to the date when the award is no longer contingent on the employee providing additional service to us. As of July 31, 2012, we had no unamortized expense associated with outstanding stock options. As of July 31, 2011 and July 31, 2010, we had total unamortized compensation expense of approximately $4,000 and $18,000, respectively. The weighted average period over which this expense was expected to be amortized was 0.3 years and 1.3 years at July 31, 2011 and July 31, 2010, respectively.

RESTRICTED STOCK

All of our non-vested restricted stock as of July 31, 2012 was issued under the 2006 Plan with vesting periods between two and five years.

A summary of restricted stock transactions under the plans is shown below.



	Number of Shares (in thousands)	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (Years)	Unamortized Expense (in thousands)
Non-vested restricted stock outstanding at July 31, 2009	35	$	15.37	1.4	$	383
Granted	5	$	15.10
Vested	(17)	$	15.37
Non-vested restricted stock outstanding at July 31, 2010	23	$	15.31	0.9	$	156
Granted	134	$	21.78
Vested	(18)	$	15.37
Non-vested restricted stock outstanding at July 31, 2011	139	$	21.54	4.0	$	2,446
Granted	28	$	20.95
Vested	(30)	$	20.67
Forfeitures	(5)	$	19.61
Non-vested restricted stock outstanding at July 31, 2012	132	$	21.68	3.1	$	2,214