Stock-Based Compensation

3 Months Ended

Nov. 26, 2016

Stock-Based Compensation [Abstract]

Stock-Based Compensation

NOTE 4 – STOCK-BASED COMPENSATION

The cost of our stock-based compensation plans is included in selling, general, and administrative expenses in the accompanying condensed consolidated statements of operations.  The total cost of our stock-based compensation plans was as follows for the periods presented (in thousands):

		Quarter Ended
		November 26,		November 28,
		2016		2015
Performance awards	$	1,078	$	625
Unvested share awards		113		112
Employee stock purchase plan		23		26
	$	1,214	$	763

During the quarter ended November 26, 2016, we issued 13,539 shares of our common stock to employees for stock-based compensation awards.  The following is a description of the developments in our stock-based compensation plans during the quarter ended November 26, 2016.

Performance Awards

On October 18, 2016, the Organization and Compensation Committee (the Compensation Committee) of the Board of Directors granted new performance-based awards for our executive officers and members of senior management.  A total of 183,381 shares may be earned by the participants based on six individual vesting conditions that are divided into two performance measures, trailing four-quarter adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA) and gross All Access Pass (AAP) sales as shown below.

	Adjusted EBITDA				Gross AAP Sales
	Award				Award
	Goal	Number of	Tranche		Goal	Number of	Tranche
	(thousands)	Shares	Status		(thousands)	Shares	Status
$	36,672	42,789	not vested	$	30,052	18,338	not vested
	41,806	42,789	not vested		35,419	18,338	not vested
	47,658	42,789	not vested		40,758	18,338	not vested
		128,367				55,014

The fiscal 2017 long-term performance awards have a maximum life of six years and compensation expense is recognized as we determine it is probable that the shares will vest.  Adjustments to compensation expense to reflect the timing of and the number of shares expected to be awarded will be made on a cumulative basis at the date of the adjustment.

In fiscal 2016, we introduced the All Access Pass, which allows our clients to access our intellectual property through an electronic portal.  Based on guidance for multiple-element revenue arrangements, we defer a significant portion of AAP sales over the life of the client’s contract.  Accordingly, sales of the All Access Pass have significantly impacted our financial results since the second quarter of fiscal 2016.  On October 18, 2016, the Compensation Committee approved a modification to the fiscal 2012 through fiscal 2016 performance awards to include the change in deferred revenue, less certain costs, and Adjusted EBITDA in the vesting calculations.  Our share price on October 18, 2016 was less than the share prices used to recognize stock-based compensation expense on the fiscal 2012 through fiscal 2016 performance awards and no incremental stock-based compensation expense was recognized from this modification.

Compensation expense recognized during the quarter ended November 26, 2016 for performance awards includes expense related to awards granted in previous periods for which the performance conditions are probable of being achieved.

At November 26, 2016, the performance conditions for four tranches of previously granted awards were achieved.  Subject to Compensation Committee approval, these tranches award a total of 68,567 shares of common stock to the participants.  These shares have not yet been distributed to the participants.

Employee Stock Purchase Plan

We have an employee stock purchase plan (ESPP) that offers qualified employees the opportunity to purchase shares of our common stock at a price equal to 85 percent of the average fair market value of our common stock on the last trading day of the calendar month in each fiscal quarter.  During the quarter ended November 26, 2016, we issued 11,043shares of our common stock toparticipants in the ESPP.