Stock-Based Compensation

3 Months Ended

Nov. 30, 2012

Stock-Based Compensation

4. Stock-Based Compensation

The Company recognizes stock-based compensation expense, reduced for estimated forfeitures, on a straight-line basis over the requisite service period of the award, which is generally the vesting period for outstanding stock awards. The Company recorded $18.8 million and $18.7 million of stock-based compensation expense gross of tax benefits, which is included in selling, general and administrative expenses within the Condensed Consolidated Statements of Operations during the three months ended November 30, 2012 and 2011, respectively. The Company recorded tax effects related to the stock-based compensation expense of $0.2 million and $0.4 million, which is included in income tax expense within the Condensed Consolidated Statements of Operations for the three months ended November 30, 2012 and 2011, respectively.

The following table summarizes stock option and stock appreciation right activity from August 31, 2012 through November 30, 2012:

	Shares Available for Grant			Options Outstanding			Aggregate Intrinsic Value (in thousands)		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (years)
Balance at August 31, 2012		4,883,919			8,677,941		$	4,719	$	25.88		2.90
Options canceled		67,629			(67,629	)			$	23.13
Restricted stock awards granted(1)		(3,362,268	)
Options exercised					(244,311	)			$	13.14
Balance at November 30, 2012		1,589,280			8,366,001		$	419	$	26.27		2.73
Exercisable at November 30, 2012					8,357,459		$	387	$	26.28		2.72

⁽¹⁾ Represents the maximum number of shares that can be issued based on the achievement of certain performance criteria.

The following table summarizes restricted stock activity from August 31, 2012 through November 30, 2012:

	Shares			Weighted - Average Grant- Date Fair Value
Non-vested balance at August 31, 2012		12,945,864		$	16.33
Changes during the period
Shares granted (1)		3,503,754		$	17.60
Shares vested		(4,375,806	)	$	15.05
Shares forfeited		(141,486	)	$	17.75
Non-vested balance at November 30, 2012		11,932,326		$	17.15

⁽¹⁾  For those shares granted that are based on the achievement of certain performance criteria, represents the maximum number of shares that can vest.

Certain key employees have been granted time-based and performance-based restricted stock awards. The time-based restricted awards granted generally vest on a graded vesting schedule over three years. The performance-based restricted awards generally vest on a cliff vesting schedule over three years and provide a range of vesting possibilities of up to a maximum of 100% or 150%, depending on the specified performance condition and the level of achievement obtained. During the three months ended November 30, 2012, the Company awarded approximately 1.8 million time-based restricted stock units and 1.7 million performance-based restricted stock units.

At November 30, 2012, there was $97.9 million of total unrecognized stock-based compensation expense related to restricted stock awards. This expense is expected to be recognized over a weighted-average period of 1.5 years.