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Share-Based Payments
 12 Months Ended
Aug. 31, 2019
Share-based Payment Arrangement, Noncash Expense [Abstract]  
Share-Based Payments Share-based Payments
Omnibus Stock Compensation Incentive and Directors’ Equity Plans
In January 2018, our stockholders approved the Amended and Restated Acuity Brands, Inc. 2012 Omnibus Stock Compensation Incentive Plan (the “Stock Incentive Plan”), which, among other things, resulted in an aggregate of 2.7 million of shares authorized for issuance pursuant to the Stock Incentive Plan. The Compensation Committee of the Board is authorized to issue awards consisting of incentive and non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance stock awards, performance stock units, stock bonus awards, and cash-based awards to eligible employees, non-employee directors, and outside consultants.
Shares available for grant under the Stock Incentive Plan, including those previously issued and outstanding prior to the amendment, were approximately 1.4 million, 1.6 million, and 1.4 million at August 31, 2019, 2018, and 2017, respectively. Any shares subject to an award under the Stock Incentive Plan that are forfeited, canceled, expire or that are settled for cash will be available for future grant under the Stock Incentive Plan.
Restricted Stock Awards
As of August 31, 2019, we had approximately 350,000 shares outstanding of restricted stock to officers, directors, and other key employees under the Stock Incentive Plan, including restricted stock units granted to foreign employees. The shares vest primarily over a four-year period and are valued at the closing stock price on the date of the grant. Compensation expense recognized related to the awards under the equity incentive plans was $25.1 million, $27.9 million, and $27.2 million in fiscal 2019, 2018, and 2017, respectively.
Activity related to restricted stock awards during the fiscal year ended August 31, 2019 was as follows (in millions, except per share data):
 
Number of
Shares
 
Weighted Average
Grant Date
Fair Value Per
Share
Outstanding at August 31, 2018
0.4
 
$
186.63

Granted
0.2
 
$
120.73

Vested
(0.2)
 
$
184.60

Forfeited*
—
 
$
159.88

Outstanding at August 31, 2019
0.4
 
$
156.32


___________________________
* Represents shares of less than 0.1 million.
As of August 31, 2019, there was $34.6 million of total unrecognized compensation cost related to unvested restricted stock, which is expected to be recognized over a weighted-average period of 1.6 years. The total weighted average fair value of shares vested during the years ended August 31, 2019, 2018, and 2017 was approximately $26.9 million, $26.6 million, and $24.8 million, respectively.
Stock Options
As of August 31, 2019, we had approximately 420,000 options outstanding to officers and other key employees under the Stock Incentive Plan. Options issued under the Stock Incentive Plan are generally granted with an exercise price equal to the fair market value of our stock on the date of grant, but never less than the fair market value on the grant date, and expire 10 years from the date of grant. These options generally vest and become exercisable over a three-year period. Compensation expense recognized related to the awards under the current and prior equity incentive plans was $2.7 million, $3.1 million, and $3.6 million in fiscal 2019, 2018, and 2017, respectively.
The fair value of each option was estimated on the date of grant using the Black-Scholes model. The dividend yield was calculated based on annual dividends paid and the trailing 12-month average closing stock price at the time of grant. Expected volatility was based on historical volatility of our stock, calculated using the most recent time period equal to the expected life of the options. The risk-free interest rate was based on the U.S. Treasury yield for a term equal to the expected life of the options at the time of grant. We used historical exercise behavior data of similar employee groups to determine the expected life of options. All inputs into the Black-Scholes model are estimates made at the time of grant. Actual realized value of each option grant could materially differ from these estimates, without impact to future reported net income.
The following weighted average assumptions were used to estimate the fair value of stock options granted in the fiscal years ended August 31:
 
2019
 
2018
 
2017
Dividend yield
0.4%
 
0.3%
 
0.2%
Expected volatility
32.8%
 
30.9%
 
28.5%
Risk-free interest rate
3.0%
 
2.0%
 
1.3%
Expected life of options
4 years
 
4 years
 
4 years
Weighted-average fair value of options
$34.06
 
$41.87
 
$57.40

Stock option activity during the years ended August 31, 2019, 2018, and 2017 was as follows:
 
Outstanding
 
Exercisable
 
Number of
Shares
(in millions)
 
Weighted Average
Exercise Price
 
Number of
Shares
(in millions)
 
Weighted Average
Exercise Price
Outstanding at August 31, 2016
0.3
 
$129.85
 
0.1
 
$83.89
Granted
—
*
$239.76
 
 
 
 
Exercised
—
*
$139.69
 
 
 
 
Outstanding at August 31, 2017
0.3
 
$156.43
 
0.2
 
$106.54
Granted
—
*
$156.39
 
 
 
 
Exercised
—
*
$115.27
 
 
 
 
Outstanding at August 31, 2018
0.3
 
$154.69
 
0.2
 
$134.13
Granted
0.1
 
$116.40
 
 
 
 
Outstanding at August 31, 2019
0.4
 
$146.70
 
0.3
 
$147.51
Range of option exercise prices:
 
 
 
 
 
 
 
$40.01 - $100.00 (average life - 3.1 years)
0.1
 
$62.25
 
0.1
 
$62.25
$100.01 - $160.00 (average life - 6.9 years)
0.2
 
$125.66
 
0.1
 
$125.09
$160.01 - $210.00 (average life - 6.2 years)
0.1
 
$207.80
 
0.1
 
$207.80
$210.01 - $239.76 (average life - 7.1 years)
0.1
 
$239.76
 
—
*
$239.76

___________________________
* Represents shares of less than 0.1 million.
The total intrinsic value of options exercised during the years ended August 31, 2018 and 2017 was $0.5 million, and $1.3 million, respectively. There were no options exercised during fiscal 2019. As of August 31, 2019, the total intrinsic value of options outstanding was $5.8 million, the total intrinsic value of options expected to vest was $0.7 million, and the total intrinsic value of options exercisable was $5.1 million. As of August 31, 2019, there was $2.8 million of total unrecognized compensation cost related to unvested options. That cost is expected to be recognized over a weighted-average period of approximately 1.3 years.
Employee Deferred Share Units
We previously allowed employees to defer a portion of restricted stock awards granted in fiscal 2003 and fiscal 2004 into the SDSP as share units. The share units are payable in shares of stock at the time of distribution from the SDSP. As of August 31, 2019, approximately 9,000 fully vested share units remain deferred, but undistributed, under the Stock Incentive Plan. There was no compensation expense related to these share units during fiscal years 2019, 2018, and 2017.
Director Deferred Share Units
Total shares available for issuance under the Director Plan were approximately 360,000, 370,000, and 390,000 at August 31, 2019, 2018, and 2017. As of August 31, 2019, approximately 119,000 share units were deferred but undistributed under the Director Plan. Compensation expense recognized related to the share units under our the Director Plan was $1.4 million, $1.3 million, and $1.2 million in fiscal 2019, 2018, and 2017, respectively.
Employee Stock Purchase Plan
Employees are able to purchase, through payroll deduction, common stock at a 5% discount on a monthly basis. There were 1.5 million shares of our common stock reserved for purchase under the plan, of which approximately 1.0 million shares remain available as of August 31, 2019. Employees may participate at their discretion.