NOTE 8 — STOCKHOLDERS’ EQUITY

Stock Incentive Plans

In September 2000, we adopted the 2000 Director Stock Incentive Plan, or the 2000 Director Plan, under which nonqualified stock options were granted to members of our Board of Directors in lieu of cash director fees. After the adoption of the 2004 Stock Incentive Plan in June 2004, we no longer granted options pursuant to the 2000 Director Plan; however, the plan remains in effect for awards outstanding as of the adoption of the 2004 Stock Incentive Plan. As of February 28, 2013 options to purchase up to 21,794 shares of common stock remained outstanding under the 2000 Director Plan.

On June 3, 2004, we adopted the 2004 Stock Incentive Plan, or the 2004 Incentive Plan, and in October 2011, we adopted the Amended and Restated 2004 Stock Incentive Plan, or the Restated Plan, to update it with respect to certain provisions and changes in the tax code since its original adoption. Under the Restated Plan, the number of shares authorized for issuance is 6,825,000 shares of common stock. Since the adoption of the Restated Plan in October 2011, we no longer grant awards pursuant to the 2004 Incentive Plan; however, the 2004 Incentive Plan remains in effect for awards outstanding as of the adoption of the Restated Plan. Under the Restated Plan, grants may be made to employees, officers, directors and consultants under a variety of awards based upon underlying equity, including, but not limited to, stock options, restricted common stock, restricted stock units or performance shares. The Restated Plan limits the number of shares that can be awarded to any employee in one year to 1,250,000. The exercise price for incentive options may not be less than the fair market value of our common stock on the date of grant and the exercise period may not exceed ten years. Vesting periods, terms and types of awards are determined by the Board of Directors and/or our Compensation and Stock Option Committee, or Compensation Committee. The Restated Plan includes a provision for the acceleration of vesting of all awards upon a change of control as well as a provision that allows forfeited or unexercised awards that have expired to be available again for future issuance. Since fiscal 2008, we have issued both restricted common stock and restricted common stock units, or RSUs, to our officers, directors and employees pursuant to our various plans. The RSUs represent the right to receive one share of common stock for each unit on the vesting date provided that the employee continues to be employed by us. On the vesting date of the RSUs, we expect to issue the shares of common stock to each participant upon vesting and expect to withhold a number of shares having a fair market value on the vesting date sufficient to fulfill tax withholding obligations. Any RSUs withheld or forfeited will be shares available for issuance in accordance with the terms of the Restated Plan.

The shares of common stock issued upon exercise of a previously granted stock option or a grant of restricted common stock or RSUs are considered new issuances from shares reserved for issuance in connection with the adoption of the various plans. We require that the option holder provide a written notice of exercise in accordance with the option agreement and plan to the stock plan administrator and full payment for the shares be made prior to issuance. All issuances are made under the terms and conditions set forth in the applicable plan. As of February 28, 2013, there were 3,411,241 shares remaining available for issuance under the Restated Plan.

For all stock compensation awards that contain graded vesting with time-based service conditions, we have elected to apply a straight-line recognition method to account for all of these awards. For existing grants that were not fully vested at November 30, 2012, there was a total of $449,000 and $392,000 of stock based compensation expense recognized during the three months ended February 28, 2013 and February 29, 2012, respectively.

The following summarizes option grants, restricted common stock and RSUs issued to members of the Board of Directors for the fiscal years 2002 through the first quarter of fiscal 2013 (in actual amounts) for service as a member:

	February 28, 2013
Granted as of:	Number of options	Exercise price
2002	40,000	$	1.00
2002	31,496	$	1.27
2003	30,768	$	1.30
2004	320,000	$	1.58
2005	300,000	$	5.91
2006	450,000	$	1.02

				Number of restricted shares isssued
2007				320,000
2008				473,455
2009				371,436
2010				131,828
2011				—
2012				617,449
2013				—

Exercise prices for all options outstanding as of February 28, 2013 are as follows:

	Options Outstanding and Exercisable
Exercise Price	Number of shares	Weighted-Average Remaining Contractual Life

$1.00 - $1.02	100,000	3.0
$1.27 - $1.30	21,794	0.2
$1.58 - $1.63	225,000	1.5
$5.91	450,000	2.3

	796,794	2.1

The following table summarizes stock option activity by plan for the three months ended February 28, 2013 and February 28, 2012, respectively, (in actual amounts). There are no stock options outstanding under our Restated Plan.

	Total Number of Shares	2004 Incentive Plan	2000 Director Plan

Outstanding at November 30, 2012	796,794	775,000	21,794
Granted	—	—	—
Exercised	—	—	—
Forfeited / Expired	—	—	—
Outstanding and exercisable at February 28, 2013	796,794	775,000	21,794

Outstanding at November 30, 2011	868,290	775,000	93,290
Granted	—	—	—
Exercised	—	—	—
Forfeited / Expired	—	—	—
Outstanding and exercisable at February 29, 2012	868,290	775,000	93,290

Stock option activity in the aggregate for the periods indicated are as follows (in actual amounts):

	Options	Weighted average exercise price		Weighted average remaining contractual Life (Years)	Aggregate Intrinsic Value

Outstanding at November 30, 2012	796,794	$	3.96
Granted	—	—
Exercised	—	—
Expired	—	—
Forfeited	—	—		—	—
Outstanding and exercisable at February 28, 2013	796,794	$	3.96	2.1	$	38,961

Weighted average per option fair value of options granted during the year		N/A

	Options	Weighted average exercise price		Weighted average remaining contractual Life (Years)	Aggregate Intrinsic Value

Outstanding at November 30, 2011	868,290	$	3.73
Granted	—	—
Exercised	—	—
Expired	—	—
Forfeited	—	—		—	—
Outstanding and exercisable at February 29, 2012	868,290	$	3.73	2.9	$	—

Weighted average per option fair value of options granted during the year		N/A

As of February 28, 2013, there was $2,985,000 of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the 2004 Incentive Plan and the Restated Plan. That unrecognized compensation cost is expected to be recognized over a weighted-average period of 2.3 years.

A summary of the status of restricted common stock and RSUs as of November 30, 2011 and November 30, 2012, and changes during the three months ended February 29, 2012 and February 28, 2013, respectively, are presented below:

							Weighted-Average Grant-Date Fair Value
	Restricted Shares		Restricted Stock Units		Total Shares		Restricted Shares		Restricted Stock Units

Outstanding at November 30, 2012	1,265,118		2,713,605		3,978,723		$	0.90	$	0.89
Granted	—		631,059		631,059		—		1.02
Issued	(310,320	)	(580,351	)	(890,671	)	0.92		0.82
Cancelled	—		(228,395	)	(228,395	)	—		0.82
Forfeited	—		(3,536	)	(3,536	)	—		0.70
Outstanding at February 28, 2013	954,798		2,532,382		3,487,180		$	0.90	$	0.94

Outstanding at November 30, 2011	464,610		2,542,728		3,007,338		$	1.30	$	0.98
Granted	670,781		1,562,506		2,233,287		0.64		0.68
Issued	(86,727	)	(379,004	)	(465,731	)	1.65		0.93
Cancelled	—		(229,826	)	(229,826	)	—		0.93
Forfeited	—		—		—		—		—
Outstanding at February 29, 2012	1,048,664		3,496,404		4,545,068		$	0.85	$	0.85

In the three months ended February 28, 2013, we granted 631,059 shares of RSUs. In the three months ended February 28, 2013, we issued 890,671 shares of restricted stock and common stock to holders of RSUs, respectively, and withheld or cancelled 231,931 RSUs, including forfeitures.

In the three months ended February 29, 2012, we granted 2,233,287 shares of restricted stock or RSUs. In the three months ended February 29, 2012, we issued 465,731 shares of common stock to holders of restricted stock and RSUs and we withheld or canceled 229,826 RSUs.