Stockholders' Equity

9 Months Ended

Aug. 31, 2013

Stockholders' Equity

Stockholders' Equity

10. Stockholders’ Equity

Per Share Results

Basic and diluted per share results were based on the following:

	For the 13 Weeks Ended,					For the 39 Weeks Ended,
	August 31, 2013			September 1, 2012		August 31, 2013		September 1, 2012
Income (loss) as reported from continuing operations for computation of basic and diluted per share results, net of tax	$	(929	)	$	1,882	$	269	$	345
Income as reported from discontinued operations for computation of basic and diluted per share results, net of tax	—			—		—		1,647
Net income (loss)	$	(929	)	$	1,882	$	269	$	1,992
Weighted average shares outstanding for computation of basic per share results	5,146,000			5,139,000		5,143,000		5,137,000
Incremental shares from assumed exercise of Griffin stock options (a)	—			4,000		7,000		4,000
Adjusted weighted average shares for computation of diluted per share results	5,146,000			5,143,000		5,150,000		5,141,000

(a) Incremental shares from the assumed exercise of Griffin stock options are not included in periods where the inclusion of such shares would be anti-dilutive.  Such assessment is based on income (loss) from continuing operations when net income includes discontinued operations.  The incremental shares from the assumed exercise of stock options in the thirteen weeks ended August 31, 2013 would have been 10,000.

Griffin Stock Option Plan

Stock options are granted by Griffin under the Griffin Land & Nurseries, Inc. 2009 Stock Option Plan (the “2009 Stock Option Plan”).  Options granted under the 2009 Stock Option Plan may be either incentive stock options or non-qualified stock options issued at fair market value on the date approved by Griffin’s Compensation Committee. Vesting of all of Griffin’s previously issued stock options is solely based upon service requirements and does not contain market or performance conditions.  Stock options issued will expire ten years from the grant date.  In accordance with the 2009 Stock Option Plan, stock options issued to non-employee directors upon their initial election to the board of directors are fully exercisable immediately upon the date of the option grant. Stock options issued to non-employee directors upon their reelection to the board of directors vest on the second anniversary from the date of grant. Stock options issued to employees vest in equal installments on the third, fourth and fifth anniversaries from the date of grant. None of the stock options outstanding at August 31, 2013 may be exercised as stock appreciation rights.

The following options were granted by Griffin under the 2009 Stock Option Plan to non-employee directors upon their re-election to Griffin’s Board of Directors:

	For the 39 Weeks Ended,
	August 31, 2013			September 1, 2012
	Number of Shares	Fair Value per Option at Grant Date		Number of Shares	Fair Value per Option at Grant Date
Non-employee directors	8,112	$	12.94	6,748	$	11.32

The fair values of all options granted were estimated as of the grant date using the Black-Scholes option-pricing model.  Assumptions used in determining the fair value of the stock options granted in the 2013 and 2012 nine month periods were as follows:

	For the 39 Weeks Ended,
	August 31, 2013			September 1, 2012
Expected volatility	40.3		%	41.1	%
Risk free interest rate	1.33		%	1.16	%
Expected option term (in years)	8.5			8.5
Annual dividend yield	$	0.20		—

Activity under the Griffin Stock Option Plan is summarized as follows:

	For the 39 Weeks Ended,
	August 31, 2013				September 1, 2012
Vested Options	Number of Shares		Weighted Avg. Exercise Price		Number of Shares		Weighted Avg. Exercise Price
Outstanding at beginning of period	80,451		$	29.95	54,075		$	27.08
Exercised	(6,776	)	$	11.81	(5,322	)	$	15.03
Vested	34,143		$	32.36	33,801		$	32.69
Forfeited	(2,667	)	$	32.28	(1,419	)	$	28.18
Outstanding at end of period	105,151		$	31.85	81,135		$	30.19

Range of Exercise Prices for Vested Options	Outstanding at August 31, 2013	Weighted Avg. Exercise Price		Weighted Avg. Remaining Contractual Life (in years)	Total Intrinsic Value
$23.00-$32.00	33,742	$	28.15	4.6	$	89
$32.00-$39.00	71,409	$	33.59	5.3	—
	105,151	$	31.85	5.1	$	89

	For the 39 Weeks Ended,
	August 31, 2013				September 1, 2012
Nonvested Options	Number of Shares		Weighted Avg. Exercise Price		Number of Shares		Weighted Avg. Exercise Price
Nonvested at beginning of period	163,390		$	29.84	190,443		$	30.56
Granted	8,112		$	29.58	6,748		$	23.70
Vested	(34,143	)	$	32.36	(33,801	)	$	32.69
Forfeited	(2,833	)	$	30.03	—		$	—
Nonvested at end of period	134,526		$	29.18	163,390		$	29.84

Range of Exercise Prices for Nonvested Options	Outstanding at August 31, 2013	Weighted Avg. Exercise Price		Weighted Avg. Remaining Contractual Life (in years)	Total Intrinsic Value
$23.00-$30.00	115,360	$	28.53	7.6	$	255
$33.00-$35.00	19,166	$	33.07	5.4	—
	134,526	$	29.18	7.3	$	255

Number of option holders at August 31, 2013 17

Compensation expense and related tax benefits for stock options were as follows:

	For the 13 Weeks Ended,				For the 39 Weeks Ended,
	August 31, 2013		September 1, 2012		August 31, 2013		September 1, 2012
Compensation expense	$	91	$	124	$	358	$	428
Related tax benefit	$	29	$	32	$	86	$	98

As of August 31, 2013, the unrecognized compensation expense related to nonvested stock options that will be recognized during future periods is as follows:

Balance of Fiscal 2013	$	107
Fiscal 2014	$	262

Fiscal 2015	$	111
Fiscal 2016	$	12

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss, net of tax, is comprised of the following:

	Unrealized			Unrealized gain			Actuarial gain
	loss on cash			on investment			on postretirement
	flow hedges			in Centaur Media			benefit plan		Total
Balance December 1, 2012	$	(2,011	)	$	1,054		$	236	$	(721	)
Before reclassfication	624			(348		)	—		276
Amount reclassified	352			(332		)	—		20
Net current period activity for other comprehensive loss	976			(680		)	—		296
Balance August 31, 2013	$	(1,035	)	$	374		$	236	$	(425	)

Changes in accumulated other comprehensive income (loss) are as follows:

	For the 13 Weeks Ended,
	August 31, 2013							September 1, 2012
	Pre-Tax		Tax (Expense) Benefit			Net-of-Tax		Pre-Tax			Tax (Expense) Benefit			Net-of-Tax
Reclassification included in net income (loss):
Loss on cash flow hedges (interest expense)	$	193	$	(71	)	$	122	$	166		$	(61	)	$	105
Total reclassification included in net income (loss)	193		(71		)	122		166			(61		)	105
Mark to market adjustment on Centaur Media for the increase in the foreign currency exchange rate	49		(17		)	32		96			(33		)	63
Mark to market adjustment on Centaur Media for the increase in fair value	450		(158		)	292		298			(104		)	194
Increase (decrease) in fair value of Griffin’s cash flow hedges	566		(209		)	357		(394		)	145			(249		)
Other comprehensive income (loss)	$	1,258	$	(455	)	$	803	$	166		$	(53	)	$	113

	For the 39 Weeks Ended,
	August 31, 2013									September 1, 2012
	Pre-Tax			Tax (Expense) Benefit			Net-of-Tax			Pre-Tax			Tax (Expense) Benefit			Net-of-Tax
Reclassifications included in net income (loss):
Realized gain on sale of Centaur Media (gain on sale)	$	(509	)	$	177		$	(332	)	$	—		$	—		$	—
Loss on cash flow hedges (interest expense)	559			(207		)	352			495			(183		)	312
Total reclassifications included in net income (loss)	50			(30		)	20			495			(183		)	312
Mark to market adjustment on Centaur Media for the (decrease) increase in the foreign currency exchange rate	(174		)	61			(113		)	52			(18		)	34
Mark to market adjustment on Centaur Media for the (decrease) increase in fair value	(361		)	126			(235		)	41			(14		)	27
Increase (decrease) in fair value of Griffin’s cash flow hedges	990			(366		)	624			(1,276		)	472			(804		)
Other comprehensive income (loss)	$	505		$	(209	)	$	296		$	(688	)	$	257		$	(431	)

Cash Dividend

Griffin did not declare a cash dividend in the 2013 or 2012 nine month periods.  During the 2013 first quarter, Griffin paid $1,028 for the cash dividend declared in the 2012 fourth quarter.  During the 2012 first quarter, Griffin paid $513 for the cash dividend declared in the 2011 fourth quarter.