6. Stockholders’ Equity

Per Share Results

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


	For the Three Months Ended
	Feb. 29, 2020		Feb. 28, 2019
Net loss	$	(320)	$	(586)

Weighted average shares outstanding for computation of basic per share results		5,075,000		5,065,000
Incremental shares from assumed exercise of Griffin stock options (a)		—		—
Adjusted weighted average shares for computation of diluted per share results		5,075,000		5,065,000

(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 the 2020 first quarter and 2019 first quarter would have been 54,000 and 21,000, respectively.

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 Plans

Through February 29, 2020, stock options were granted by Griffin under the Griffin Industrial Realty, Inc. 2009 Stock Option Plan (as amended, 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 issued to non-employee directors upon their re-election 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 February 29, 2020 may be exercised as stock appreciation rights.

There were no options granted in the 2020 and 2019 first quarters.

In March 2020, Griffin’s Board of Directors adopted and approved the Griffin Industrial Realty, Inc. and Griffin Industrial, LLC 2020 Incentive Award Plan (the “2020 Incentive Award Plan”). The 2020 Incentive Award Plan was effective as of the date it was adopted by the Board, subject to stockholder approval at Griffin’s 2020 Annual Meeting of Stockholders (the “2020 Annual Meeting”). The 2020 Incentive Award Plan will replace the 2009 Stock Option Plan and authorizes for grant a total of 300,000 shares (plus any shares subject to awards under the 2009 Stock Option Plan, as of the date of stockholder approval of the 2020 Incentive Award Plan, that are forfeited, expire, are converted to shares of another person or are settled for cash), subject to certain adjustments in the 2020 Incentive Award Plan. In addition to granting stock options, the 2020 Incentive Award Plan also enables Griffin to grant stock appreciation rights, restricted stock awards, restricted stock unit awards, partnership interests, other equity or cash based awards and dividend equivalents. If Griffin’s stockholders approve the 2020 Incentive Award Plan, no new awards will be granted under the 2009 Stock Option Plan; however, all then-outstanding awards under the 2009 Stock Option Plan would remain outstanding in accordance with their terms. If, however, Griffin stockholders do not approve the 2020 Incentive Award Plan, the 2020 Incentive Award Plan (and any awards thereunder) will not become effective, and the 2009 Stock Option Plan would remain in effect in accordance with its current terms and conditions (see Note 10).


Number of option holders at February 29, 2020		26

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


	For the Three Months Ended
	Feb. 29, 2020		Feb. 28, 2019
Compensation expense	$	57	$	90

Related tax benefit	$	9	$	13

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

As of February 29, 2020, the unrecognized compensation expense related to nonvested stock options that will be recognized during future periods is as follows:


Balance of Fiscal 2020	$	122
Fiscal 2021	$	39

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


	For the Three Months Ended
	February 29, 2020			February 28, 2019
	Number of		Weighted Avg.	Number of		Weighted Avg.
	Shares		Exercise Price	Shares		Exercise Price
Outstanding at beginning of period	189,822	$	28.23	224,001	$	28.20
Forfeited	—	$	—	(1,749)	$	34.30
Outstanding at end of period	189,822	$	28.23	222,252	$	28.15


				Weighted Avg.
				Remaining
Range of Exercise Prices for	Outstanding at	Weighted Avg.		Contractual Life	Total Intrinsic
Vested and Nonvested Options	February 29, 2020	Exercise Price		(in years)	Value
$23.00 - $28.00	112,638	$	26.76	6.0	$	1,519
$28.00 - $32.00	65,212	$	29.21	2.3		719
$32.00 - $39.00	11,972	$	36.74	7.8		42
	189,822	$	28.23	4.8	$	2,280

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss), net of tax, comprised of unrealized gains on cash flow hedges is as follows:


	For the Three Months Ended
	Feb. 29, 2020			Feb. 28, 2019
Balance at beginning of period	$	(3,141)	$	2,395
Other comprehensive loss before reclassifications		(2,524)		(1,500)
Amounts reclassified		95		42
Net activity for other comprehensive loss		(2,429)		(1,458)
Balance at end of period	$	(5,570)	$	937

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


	For the Three Months Ended
	February 29, 2020						February 28, 2019
			Tax						Tax
			(Expense)		Net-of				(Expense)		Net-of
	Pre-Tax		Benefit		Tax		Pre-Tax		Benefit		Tax
Reclassification included in net loss:
Loss on cash flow hedges (interest expense)	$	125	$	(30)	$	95	$	55	$	(13)	$	42

Change in other comprehensive loss:
Decrease in fair value adjustments on Griffin’s cash flow hedges		(3,401)		877		(2,524)		(1,923)		423		(1,500)

Other comprehensive loss	$	(3,276)	$	847	$	(2,429)	$	(1,868)	$	410	$	(1,458)

Cash Dividend

Griffin did not declare a cash dividend in the 2020 or 2019 first quarters. During the 2020 first quarter, Griffin paid $2,538 for the cash dividend declared in the fiscal 2019 fourth quarter. During the 2019 first quarter, Griffin paid $2,279 for the cash dividend declared in the fiscal 2018 fourth quarter.