Stock-Based Compensation

9 Months Ended

Apr. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award

STOCK-BASED COMPENSATION

We determine the fair value of stock options and restricted stock issued under our long term incentive plans as of the grant date. We recognized the related compensation expense over the period from the date of grant to the date when the award is no longer contingent on the employee providing additional service to the Company.

Stock Options

Our 1995 Long Term Incentive Plan (the “1995 Plan”) provided for grants of both incentive and non-qualified stock options principally at an option price per share equal to the closing market price of our Common Stock on the date of grant. Stock options were generally granted with a five-year vesting period and a 10-year term. The stock options generally vest 25% two years after the grant date and 25% on each of the three following anniversaries of the grant date. This plan expired for purposes of issuing new grants on August 5, 2005. All stock issued from option exercises under this plan was from authorized but unissued stock. All restricted stock issued was from treasury stock.

The Oil-Dri Corporation of America 2006 Long Term Incentive Plan (the “2006 Plan”) permits the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other stock-based and cash-based awards. Our employees and outside directors are eligible to receive grants under the 2006 Plan. The total number of shares of stock subject to grants under the 2006 Plan may not exceed 937,500. Option grants covering 25,000 shares have been issued to our outside directors with a vesting period of one year and option grants covering 32,500 shares have been issued to employees with vesting similar to the vesting described above under the 1995 Plan. In addition, 257,115 restricted shares have been issued under the 2006 Plan.

The Oil-Dri Corporation of America Outside Director Stock Plan provides for grants of stock options to our directors at an option price per share of 100% of the fair market value of Common Stock on the date of grant. Stock options have been granted to our directors for a 10-year term with a one year vesting period. There are 12,500 stock options outstanding as of April 30, 2012 and no stock options are available for future grants under this plan. All stock issued under this plan was from treasury stock.

No stock options were granted in the first nine months of fiscal years 2012 or 2011. Changes in our stock options during the first nine months of fiscal 2012 were as follows:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
	(in thousands)				(Years)	(in thousands)
Options Outstanding, July 31, 2011	189		$	11.10	2.8	$	1,882
Exercised	(26	)	$	7.35		$	329
Options outstanding, April 30, 2012	163		$	11.70	2.3	$	1,540
Options exercisable, April 30, 2012	163		$	11.70	2.3	$	1,540

The amount of cash received from the exercise of stock options during the third quarter of fiscal 2012 was $71,000 and the related tax benefit was $24,000. The amount of cash received from the exercise of stock options during the third quarter of fiscal 2011 was $467,000 and the related tax benefit was $153,000. The amount of cash received from the exercise of stock options during the first nine months of fiscal 2012 was $192,000 and the related tax benefit was $89,000. The amount of cash received from the exercise of stock options during the first nine months of fiscal 2011 was $1,016,000 and the related tax benefit was $421,000.

Restricted Stock

The 1995 Plan and the 2006 Plan both provide for grants of restricted stock. The vesting schedule under the 1995 Plan has varied, but has generally been three years or less. Grants issued under the 2006 Plan to date have vesting periods between two and five years.

Under the 2006 Plan, 20,000 new restricted shares of Common Stock were granted in the third quarter of fiscal 2012 and none were granted in the third quarter of fiscal 2011. In the first nine months of fiscal 2012, 28,000 restricted shares of Common Stock were granted. In the first nine months of fiscal 2011, 4,000 restricted shares of Common Stock and 129,933 restricted shares of Class B Stock were granted.

Included in our stock-based compensation expense in the third quarter of fiscal years 2012 and 2011 was $179,000 and $157,000, respectively, related to unvested restricted stock. In the first nine months of fiscal years 2012 and 2011, the expense related to the unvested restricted stock was $513,000 and $465,000, respectively.

Changes in our restricted stock outstanding during the first nine months of fiscal 2012 were as follows:

	Restricted Shares (in thousands)		Weighted Average Grant Date Fair Value
Unvested restricted stock at July 31, 2011	139		$	21.54
Vested	(25	)	$	21.82
Granted	28		$	20.95
Canceled	(5	)	$	19.61
Unvested restricted stock at April 30, 2012	137		$	21.43