Stockholders' Equity

12 Months Ended

Aug. 31, 2016

12. Stockholders’ Equity

The 2011 Stock Award and Incentive Plan (the “2011 Plan”) was adopted by the Board of Directors during the first quarter of fiscal year 2011 and approved by the stockholders during the second quarter of fiscal year 2011. The 2011 Plan provides for the granting of restricted stock awards, restricted stock unit awards and other stock-based awards. The maximum aggregate number of shares that may be subject to awards under the 2011 Plan is 18,350,000. If any portion of an outstanding award that was granted under the 2002 Stock Incentive Plan (the “2002 Plan”), which was terminated immediately upon the effectiveness of the 2011 Plan, for any reason expires or is canceled or forfeited on or after the date of termination of the 2002 Plan, the shares allocable to the expired, canceled or forfeited portion of such 2002 Plan award shall be available for issuance under the 2011 Plan.

The 2011 Employee Stock Purchase Plan (the “2011 ESPP”) was adopted by the Company’s Board of Directors during the first quarter of fiscal year 2011 and approved by the shareholders during the second quarter of fiscal year 2011 with 6,000,000 shares authorized for issuance. The offering period beginning July 1, 2011 was the first offering period shares were issued under the 2011 ESPP. The Company also adopted a tax advantaged sub-plan under the 2011 ESPP for its Indian employees. Shares are issued under the Indian sub-plan from the authorized shares under the 2011 ESPP. The offering period ending June 30, 2011 was the final offering period shares were issued under the previous ESPP (the “2002 ESPP”).

a. Stock Options and Stock Appreciation Rights

There were no stock options or stock appreciation rights (“SARS”) granted (collectively known as “Options”), excluding those granted under the ESPP, during fiscal year 2016. There were no stock options granted and 0.4 million stock appreciation rights granted, excluding those granted under the ESPP, during fiscal years 2015. The total intrinsic value of Options exercised during fiscal years 2016, 2015 and 2014 was $0.5 million, $1.0 million and $0.1 million, respectively. As of August 31, 2016, there was no unrecognized compensation cost related to non-vested options. The total fair value of Options vested during fiscal years 2016, 2015 and 2014 was $0.0 million, $2.8 million and $0.0 million, respectively.

The following table summarizes shares available for grant and SARS activity from August 31, 2015 through

August 31, 2016.

								Weighted-
						Weighted-		Average
		Shares		Average		Average		Remaining
		Available	SARS	Intrinsic Value		Exercise		Contractual
		for Grant	Outstanding	(in thousands)		Price		Life (years)
Balance at August 31, 2015		8,376,072	3,760,871	$	492,060	$	26.60	1.53
	SARS canceled	1,185,895	(1,185,895)			$	29.86
	Restricted stock awards granted, net of
	forfeitures^(a)	(4,663,228)	―
	SARS exercised	―	(135,910)			$	20.92
Balance at August 31, 2016		4,898,739	2,439,066	$	1,066	$	25.32	1.13
Exercisable at August 31, 2016			2,439,066	$	1,066	$	25.32	1.13

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

b. Restricted Stock Awards

Certain key employees have been granted time-based, performance-based and market-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 to five 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. The market-based awards have a vesting condition that is tied to the Company’s stock performance in relation to the Standard and Poor’s (S&P) Super Composite Technology Hardware and Equipment Index. During the fiscal year ended August 31, 2016, the Company awarded approximately 2.6 million time-based restricted stock units, 1.3 million performance-based restricted stock units and 0.4 million market-based restricted stock units.

The stock-based compensation expense for the time-based and performance based restricted stock awards (including restricted stock and restricted stock units) is measured at fair value on the date of grant based on the number of shares expected to vest and the quoted market price of the Company’s common stock. For restricted stock awards with performance conditions, stock-based compensation expense is originally based on the number of shares that would vest if the Company achieved 100% of the performance goal, which was the probable outcome at the grant date. Throughout the requisite service period, management monitors the probability of achievement of the performance condition. If it becomes probable, based on the Company’s performance, that more or less than the current estimate of the awarded shares will vest, an adjustment to stock-based compensation expense will be recognized as a change in accounting estimate in the period the probability changes. The stock-based compensation expense for the market-based restricted stock awards is measured at fair value on the date of grant. The market conditions are considered in the grant date fair value using a Monte Carlo valuation model, which utilizes multiple input variables to determine the probability of the Company achieving the specified market conditions. Stock-based compensation expense related to an award with a market condition will be recognized over the requisite service period regardless of whether the market condition is satisfied, provided that the requisite service period has been completed.

During fiscal years 2016, 2015 and 2014, the Company recorded a $7.5 million, a $5.2 million and a $45.8 million reversal, respectively, to stock-based compensation expense due to decreased expectations for the vesting of certain restricted stock awards.

In connection with the sale of the AMS business, the vesting for certain outstanding time-based restricted stock awards previously granted to AMS employees was accelerated. As a result, 0.2 million awards were vested during the third quarter of fiscal year 2014, which accelerated approximately $2.4 million of stock-based compensation expense. Such expense is included in income from discontinued operations, net of tax, within the Consolidated Statement of Operations for the fiscal year ended August 31, 2014.

At August 31, 2016, there was $53.6 million of total unrecognized stock-based compensation expense related to restricted stock awards granted under the 2011 Plan. This expense is expected to be recognized over a weighted-average period of 1.4 years.

	The following table summarizes restricted stock activity from August 31, 2015 through August 31, 2016:


					Weighted-
					Average
					Grant-Date
				Shares	Fair Value
		Unvested balance at August 31, 2015		11,931,585	$	19.44
		Changes during the period
			Shares granted^(a)	5,376,030	$	24.02
			Shares vested	(1,817,635)	$	19.18
			Shares forfeited	(712,802)	$	20.50
		Unvested balance at August 31, 2016		14,777,178	$	21.09

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

c. Employee Stock Purchase Plan

Employees are eligible to participate in the ESPP after 90 days of employment with the Company. The ESPP permits eligible employees to purchase common stock through payroll deductions, which may not exceed 10% of an employee’s compensation, as defined in the ESPP, at a price equal to 85% of the fair value of the common stock at the beginning or end of the offering period, whichever is lower. The ESPP is intended to qualify under Section 423 of the Internal Revenue Code. There were 1,246,947, 1,005,916 and 1,077,071 shares purchased under the ESPP during fiscal years 2016, 2015 and 2014, respectively. At August 31, 2016, a total of 11,603,855 shares had been issued under the ESPP.

	The fair value of shares issued under the ESPP was estimated on the commencement date of each offering period using the
Black-Scholes option pricing model. The following weighted-average assumptions were used in the model for each respective period:

			Fiscal Year Ended August 31,
			2016		2015		2014
		Expected dividend yield	0.7	%	0.8	%	0.9	%
		Risk-free interest rate	0.3	%	0.1	%	0.1	%
		Expected volatility	28.1	%	24.5	%	33.8	%
		Expected life	0.5 years		0.5 years		0.5 years

d. Dividends

The following table sets forth certain information relating to the Company’s cash dividends declared to common stockholders of the Company during fiscal years 2016 and 2015:

				Total of Cash
	Dividend	Dividend		Dividends		Date of Record for	Dividend Cash
	Declaration Date	per Share		Declared		Dividend Payment	Payment Date
	(in thousands, except for per share data)
Fiscal year 2016:	October 14, 2015	$	0.08	$	15,906	November 16, 2015	December 1, 2015
	January 21, 2016	$	0.08	$	15,947	February 16, 2016	March 1, 2016
	April 21, 2016	$	0.08	$	15,940	May 16, 2016	June 1, 2016
	July 21, 2016	$	0.08	$	15,575	August 15, 2016	September 1, 2016

Fiscal year 2015:	October 16, 2014	$	0.08	$	15,973	November 14, 2014	December 1, 2014
	January 21, 2015	$	0.08	$	16,020	February 13, 2015	March 2, 2015
	April 15, 2015	$	0.08	$	15,988	May 15, 2015	June 1, 2015
	July 16, 2015	$	0.08	$	15,980	August 14, 2015	September 1, 2015