5. SHAREHOLDERS' EQUITY

9 Months Ended

May 31, 2013

Equity [Abstract]

Note 5. SHAREHOLDERS' EQUITY

Note 5: SHAREHOLDERS’ EQUITY

Dividend

The Board of Directors declared cash dividends during fiscal year 2012. The details of dividends paid are in the following table:

Record Date	Distribution Date	Number of Shares Outstanding on Record Date		Dividend per Share	Total Amount
02/21/2012	03/01/2012		15,813,844	$0.05	$	790,692
04/27/2012	05/08/2012		15,923.019	$0.05	$	796,151
08/07/2012	08/10/2012		15,923.019	$0.05	$	796,151
Total					$	2,382,994

The Board of Directors also declared cash dividends during the first nine months of fiscal year 2013.

Record Date	Distribution Date	Number of Shares Outstanding on Record Date		Dividend per Share		Total Amount
11/08/2012	11/13/2012		15,927,806	$	0.05	$	796,390
12/24/2012	12/28/2012		16,021,309	$	0.14*	$	2,242,983
05/07/2013	05/10/2013		16,030,433	$	0.03**	$	480,913
Total						$	3,520,286

*

As a tax benefit to our shareholders considering the increase in federal income tax for capital gains in 2013, the Board of Directors declared an accelerated cash dividend, $0.14 per share, on December 14, 2012, consisting of all of the planned February 2013 distribution of $0.05 per share, plus $0.03 per share of the planned $0.05 per quarter per share for the remaining three fiscal quarters ending in calendar year 2013.

**

The Board of Directors decided to increase the May dividend distribution by 50% from the planned $0.02/share to $0.03/share. Although dividend distributions are currently expected to continue on a quarterly basis, the Board of Directors reserves the right to discontinue the dividend distribution any time to meet the cash priorities of the business.

Stock Option Plan

In September 1996, the Board of Directors adopted, and the shareholders approved, the 1996 Stock Option Plan (the "Option Plan") under which a total of 1,000,000 shares of common stock had been reserved for issuance. In March 1999, the shareholders approved an increase in the number of shares that may be granted under the Option Plan to 2,000,000. In February 2000, the shareholders approved an increase in the number of shares that may be granted under the Option Plan to 4,000,000. In December 2000, the shareholders approved an increase in the number of shares that may be granted under the Option Plan to 5,000,000. Furthermore, in February 2005, the shareholders approved an additional 1,000,000 shares, resulting in the total number of shares that may be granted under the Option Plan to 6,000,000. The 1996 Stock Option Plan terminated in September 2006 by its term.

On February 23, 2007, the Board of Directors adopted and the shareholders approved the 2007 Stock Option Plan under which a total of 1,000,000 shares of common stock had been reserved for issuance.

Qualified Incentive Stock Options (Qualified ISO)

As of May 31, 2013, employees hold Qualified ISO to purchase 534,000 shares of common stock at exercise prices ranging from $1.00 to $5.06 which were granted prior to May 31, 2013.

Transactions in FY13	Number of Options			Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Life
Outstanding, August 31, 2012		689,800		$	1.74
Granted		20,000		$	5.06
Exercised		(175,800	)	$	1.90
Outstanding, May 31, 2013		534,000		$	1.82		4.21
Exercisable, May 31, 2013		392,600		$	1.45		4.05

Non-Qualified Stock Options (NQSO)

As of May 31, 2013, the outside members of the Board of Directors hold options to purchase 36,600 shares of common stock at exercise prices ranging from $1.67 to $6.68, which were granted prior to May 31, 2013.

Transactions in FY13	Number of Options		Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Life
Outstanding, August 31, 2012		36,600	$	3.47
Outstanding, May 31, 2013		36,600	$	3.47		7.39
Exercisable, May 31, 2013		19,400	$	3.14		6.24

The weighted-average remaining contractual life of options outstanding issued under the Plan, both Qualified ISO and NQSO, was 4.4 years at May 31, 2013. The exercise prices for the options outstanding at May 31, 2013 ranged from $1.00 to $6.68, and the information relating to these options is as follows:

Exercise Price				Awards Outstanding						Awards Exercisable
Low		High		Quantity		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Quantity		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price
$	1.00	$	1.50		355,100		4.2 years	$	1.06		319,700		4.0 years	$	1.07
$	1.51	$	3.00		34,600		6.7 years	$	2.30		12,200		6.4 years	$	1.96
$	3.01	$	4.50		156,900		4.4 years	$	3.26		76,100		4.3 years	$	3.11
$	4.51	$	6.68		24,000		4.3 years	$	5.33		4,000		4.3 years	$	6.68
					570,600		4.4 years	$	1.92		412,000		4.2 years	$	1.53