7. Stockholders’ Equity

Per Share Results

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


	For the Fiscal Years Ended
	Nov. 30, 2019		Nov. 30, 2018		Nov. 30, 2017
Net income (loss)	$	3,668	$	(1,653)	$	4,627

Weighted average shares outstanding for computation of basic per share results		5,070,000		5,023,000		5,010,000
Incremental shares from assumed exercise of Griffin stock options (a)		36,000		—		28,000
Adjusted weighted average shares for computation of diluted per share results		5,106,000		5,023,000		5,038,000

(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. The incremental shares from the assumed exercise of stock options for fiscal 2018 would have been 57,000 shares.

Universal Shelf Filing/At-the-Market Equity Offering Program

On April 11, 2018, Griffin filed a universal shelf registration statement on Form S-3 (the “Universal Shelf”) with the SEC. Under the Universal Shelf, Griffin may offer and sell up to $50,000 of a variety of securities including common stock, preferred stock, warrants, depositary shares, debt securities, units or any combination of such securities during the three year period that commenced upon the Universal Shelf becoming effective on April 25, 2018. Under the Universal Shelf, Griffin may periodically offer one or more types of securities in amounts, at prices and on terms announced, if and when the securities are ever offered. On May 10, 2018, Griffin filed a prospectus supplement with the SEC under which it may issue and sell, from time to time, up to an aggregate of $30,000 of its common stock (“Common Stock”) under an “at-the-market” equity offering program (the “ATM Program”) through Robert W. Baird & Co. Incorporated (“Baird”), as sales agent. Under a sales agreement with Baird, Griffin will set the parameters for the sales of its Common Stock under the ATM Program, including the number of shares to be issued, the time period during which sales are requested to be made, limitations on the number of shares that may be sold in any one trading day and any minimum price below which sales of shares may not be made. Sales of Common Stock, if any, under the ATM Program would be made in offerings as defined in Rule 415 of the Securities Act of 1933, as amended. In addition, with the prior consent of Griffin, Baird may also sell shares in privately negotiated transactions. Griffin expects to use net proceeds, if any, from the ATM Program for acquisitions of target properties consistent with Griffin’s investment strategies, repayment of debt and general corporate purposes. If Griffin obtains additional capital by issuing equity, the interests of its existing stockholders will be diluted. If Griffin incurs additional indebtedness, that indebtedness may impose financial and other covenants that may significantly restrict Griffin’s operations.

Griffin Stock Option Plan

Stock options are granted by Griffin under the Griffin Industrial Realty, 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 an exercise price not less than fair market value on the date approved by Griffin’s Compensation Committee. Vesting of all of Griffin’s stock options is solely based upon service requirements and does not contain market or performance conditions.

Stock options issued 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 granted to non‑employee directors upon their reelection to the board of directors vest on the second anniversary from the date of grant. Stock options granted 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 November 30, 2019 may be exercised as stock appreciation rights.

The following options were granted by Griffin under the 2009 Stock Option Plan to non-employee directors and employees:


	For the Fiscal Years Ended
	Nov. 30, 2019			Nov. 30, 2018			Nov. 30, 2017
		Fair Value per			Fair Value per			Fair Value per
	Number of	Option at		Number of	Option at		Number of	Option at
	Shares	Grant Date		Shares	Grant Date		Shares	Grant Date
Non-employee directors	5,946	$	12.87	5,195	$	14.41	6,570	$	13.49
Employees	-	$	-	-			5,000	$	11.13
	5,946			5,195			11,570

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 were as follows:


	For the Fiscal Years Ended
	Nov. 30, 2019		Nov. 30, 2018		Nov. 30, 2017
Expected volatility	30.9	%	30.5	%	32.7 to 39.6	%
Risk free interest rates	2.3	%	3.0	%	2.1 to 2.2	%
Expected option term (in years)	8.5		8.5		7.5 to 8.5
Annual dividend yield	1.2	%	1.1	%	0.8 to 0.9	%


Number of option holders at November 30, 2019		26

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


	For the Fiscal Years Ended
	Nov. 30, 2019		Nov. 30, 2018		Nov. 30, 2017
Compensation expense	$	261	$	350	$	349

Related tax benefit	$	43	$	53	$	86

For all years presented, the forfeiture rate used for directors ranged from 0% to 2%, the forfeiture rate used for executives was 17.9% and the forfeiture rate used for employees was 38.3%. The rates utilized were based on the historical activity of the grantees.

As of November 30, 2019, the unrecognized compensation expense related to nonvested stock options that will be recognized during future periods is as follows:


Fiscal 2020	$	149
Fiscal 2021	$	39

The total grant date fair value of options vested during fiscal 2019, fiscal 2018 and fiscal 2017 was $472, $69 and $55, respectively. The intrinsic value of options exercised in fiscal 2019 and fiscal 2018 was $299 and $765, respectively. There were no options exercised in fiscal 2017.

A summary of the activity under the 2009 Griffin Stock Option Plan is as follows:


		Weighted Avg.
	Options	Exercise Price
Outstanding at November 30, 2016	324,546	$	29.23
Granted	11,570	$	30.59
Forfeited	(2,354)	$	36.82
Outstanding at November 30, 2017	333,762	$	29.22
Granted	5,195	$	38.48
Exercised	(94,677)	$	31.18
Forfeited	(20,279)	$	33.78
Outstanding at November 30, 2018	224,001	$	28.20
Granted	5,946	$	36.99
Exercised	(32,337)	$	28.57
Forfeited	(7,788)	$	32.62
Outstanding at November 30, 2019	189,822	$	28.23


				Weighted Avg.
				Remaining
Range of Exercise Prices for	Outstanding at	Weighted Avg.		Contractual Life	Total Intrinsic
Vested and Nonvested Options	November 30, 2019	Exercise Price		(in years)	Value
$23.00 - $28.00	112,638	$	26.76	6.2	$	1,340
$28.00 - $32.00	65,212	$	29.21	2.5		615
$32.00 - $39.00	11,972	$	36.74	8.1		23
	189,822	$	28.23	5.1	$	1,978

Accumulated Other Comprehensive Income (Loss)

In fiscal 2017, Griffin sold all of its remaining shares of Centaur Media (see Note 9). Upon the sale, the change, net of tax, in the value of the shares of Centaur Media that were sold during the time Griffin held those shares was reclassified from AOCI and included in Griffin’s consolidated statement of operations. In fiscal 2017, $172 was reclassified from AOCI as a result of the sale of its remaining shares of Centaur Media common stock.

Accumulated other comprehensive income (loss) for fiscal 2019, fiscal 2018 and fiscal 2017, is comprised of the following:


	Unrealized Gain		Unrealized Gain
	(Loss) on Cash		(Loss) on Investment
	Flow Hedges		in Centaur Media		Total
Balance at November 30, 2016	$	(1,062)	$	13	$	(1,049)
Other comprehensive (loss) income before reclassifications		(45)		159		114
Amounts reclassified		823		(172)		651
Net activity for other comprehensive loss		778		(13)		765
Balance at November 30, 2017		(284)		—		(284)
Other comprehensive income before reclassifications		2,242		—		2,242
Amounts reclassified		473		—		473
Adoption of ASU No. 2018-02 - reclassification of deferred taxes to retained earnings		(36)		—		(36)
Net activity for other comprehensive income		2,679		—		2,679
Balance at November 30, 2018		2,395		—		2,395
Other comprehensive income before reclassifications		(5,560)		—		(5,560)
Amounts reclassified		24		—		24
Net activity for other comprehensive loss		(5,536)		—		(5,536)
Balance at November 30, 2019	$	(3,141)	$	—	$	(3,141)

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


	For the Fiscal Years Ended
	November 30, 2019						November 30, 2018						November 30, 2017
			Tax						Tax						Tax
			(Expense)						(Expense)						(Expense)
	Pre-Tax		Benefit		Net-of-Tax		Pre-Tax		Benefit		Net-of-Tax		Pre-Tax		Benefit		Net-of-Tax
Reclassifications included in net income (loss):
Loss on cash flow hedges (interest expense)	$	32	$	(8)	$	24	$	636	$	(163)	$	473	$	1,299	$	(476)	$	823
Realized gain on sale of Centaur Media (gain on sale)		—		—		—		—		—		—		(281)		109		(172)
Total reclassifications included in net income (loss)		32		(8)		24		636		(163)		473		1,018		(367)		651
(Decrease) increase in fair value adjustment on Griffin's cash flow hedges		(7,154)		1,594		(5,560)		2,876		(634)		2,242		(58)		13		(45)
Mark to market adjustment on Centaur Media for an increase in fair value		—		—		—		—		—		—		220		(77)		143
Mark to market adjustment on Centaur Media for an increase in the foreign currency exchange rate		—		—		—		—		—		—		25		(9)		16
Total change in other comprehensive income (loss)		(7,154)		1,594		(5,560)		2,876		(634)		2,242		187		(73)		114
Total other comprehensive (loss) income	$	(7,122)	$	1,586	$	(5,536)	$	3,512	$	(797)	$	2,715	$	1,205	$	(440)	$	765

Cash Dividends

In fiscal 2019, fiscal 2018 and fiscal 2017, Griffin declared annual cash dividends of $0.50, $0.45 and $0.40 per common share, respectively, which were paid in the first quarters of fiscal 2020, fiscal 2019 and fiscal 2018, respectively.

Stock Repurchases

In fiscal 2016, Griffin’s Board of Directors authorized a stock repurchase program whereby Griffin could repurchase up to $5,000 of its outstanding Common Stock over a twelve month period in privately negotiated transactions. The stock repurchase program expired on May 10, 2017. In fiscal 2017, prior to its expiration, Griffin repurchased 47,173 shares of its outstanding Common Stock for $1,474. Under this repurchase program, Griffin repurchased a total of 152,173 shares of its Common Stock for $4,828.

See Supplemental Cash Flow Information in Note 9 for information on Common Stock received in connection with the exercise of stock options.