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Stockholders' Equity
 12 Months Ended
Jul. 31, 2013
Stockholders' Equity

15.   STOCKHOLDERS’ EQUITY

Treasury Stock

The Company entered into a repurchase agreement, dated as of August 12, 2011 (the “August 2011 Repurchase Agreement”), to purchase shares of its common stock from the Estate of Wade F.B. Thompson (the “Estate”) in a private transaction. Pursuant to the terms of the August 2011 Repurchase Agreement, on August 15, 2011, the Company purchased from the Estate 1,000,000 shares of its common stock at a price of $20.00 per share, and held them as treasury stock, representing an aggregate purchase price of $20,000. The closing price of Thor common stock on August 12, 2011 was $20.62. The Estate held shares of common stock of the Company previously owned by the late Wade F. B. Thompson, the Company’s co-founder and former Chief Executive Officer. At the time of the repurchase transaction, Alan Siegel, a member of the board of directors of the Company (the “Board”), served as a co-executor of the Estate. The repurchase transaction was evaluated and approved by members of the Board who are not affiliated with the Estate. The Company used available cash to purchase the shares. The number of shares repurchased by the Company represented 1.8% of the Company’s issued and outstanding common stock prior to the repurchase.

 

The Company entered into a repurchase agreement, dated as of January 18, 2012 (the “January 2012 Repurchase Agreement”), to purchase shares of its common stock from the Estate in a private transaction. Pursuant to the terms of the January 2012 Repurchase Agreement, on January 20, 2012, the Company purchased from the Estate 1,000,000 shares of its common stock at a price of $28.50 per share, and held them as treasury stock, representing an aggregate purchase price of $28,500. The closing price of Thor common stock on January 18, 2012 was $29.34. The repurchase transaction was evaluated and approved by members of the Board who are not affiliated with the Estate. The Company used available cash to purchase the shares. The number of shares repurchased by the Company represented 1.8% of the Company’s issued and outstanding common stock prior to the repurchase.

The Company also entered into separate repurchase agreements (collectively, the “Catterton Repurchase Agreements”) with each of Catterton Partners VI, L.P., Catterton Partners VI Offshore, L.P., CP6 Interest Holdings, L.L.C., and CPVI Coinvest, L.L.C. (collectively, “Catterton”), each dated as of January 18, 2012, to purchase shares of its common stock from Catterton in a private transaction. Pursuant to the terms of the Catterton Repurchase Agreements, on January 20, 2012, the Company purchased from Catterton an aggregate of 1,000,000 shares of its common stock at a price of $28.50 per share, and held them as treasury stock, representing an aggregate purchase price of $28,500. The closing price of Thor common stock on January 18, 2012 was $29.34. The Company used available cash to purchase the shares. The number of shares repurchased by the Company represented 1.8% of the Company’s issued and outstanding common stock prior to the repurchase.

Stock-Based Compensation

The Board approved the Thor Industries, Inc. 2010 Equity and Incentive Plan (the “2010 Equity and Incentive Plan”) on October 25, 2010 and the 2006 Equity Incentive Plan (the “2006 Equity Incentive Plan”) on October 16, 2006. These plans were subsequently approved by shareholders at the 2010 and 2006 annual meetings, respectively. These plans are designed, among other things, to replace the Company’s 1999 Stock Option Plan (the “1999 Plan”) and the Company’s 1997 Restricted Stock Plan (the “1997 Plan”). Upon approval of the 2006 Equity Incentive Plan, the 1999 Plan and the 1997 Plan were frozen. As a result, there will be no further grants pursuant to either the 1999 Plan or the 1997 Plan. However, outstanding grants under the 1999 Plan remain outstanding, subject to the respective terms and conditions of the Plan. The maximum number of shares issuable under the 2010 Equity and Incentive Plan is 2,000,000 and under the 2006 Equity Incentive Plan is 1,100,000. Remaining shares available to be granted under the 2010 Equity and Incentive Plan are 1,850,461 and under the 2006 Equity Incentive Plan are 30,000 as of July 31, 2013. Awards may be in the form of options (incentive stock options and non-statutory stock options), restricted stock, restricted stock units, performance compensation awards and stock appreciation rights. Options typically expire 10 years from the date of grant and are vested evenly over 3 to 5 years from the date of grant.

Stock Options – A summary of option activity under the 1999 Plan, the 2010 Equity and Incentive Plan and the 2006 Equity Incentive Plan is as follows:

 

    2013     2012     2011  
    Shares     Weighted-
Average
Exercise Price		     Shares     Weighted-
Average
Exercise Price		     Shares     Weighted-
Average
Exercise Price		  

Outstanding at beginning of year

         732,725      $ 28.89        1,433,225      $ 30.90        1,381,725      $ 30.20   

Exercised

     (498,412)        28.62        (80,500)        17.74        (78,500)        13.33   

Forfeited

     (120,000)        27.84        (600,000)        35.18        –        –   

Expired

     (8,000)        26.91        (20,000)        29.25        –        –   

Granted

     –        –        –        –        130,000        27.72   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Outstanding at end of year

     106,313      $ 31.48        732,725      $ 28.89        1,433,225      $ 30.90   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Vested and expected to vest at end of year

     106,313      $ 31.48        712,725      $ 28.82        833,225      $ 27.82   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Exercisable at end of year

     106,313      $         31.48        566,059      $         29.24        609,891      $         27.84   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

The weighted average remaining contractual life for outstanding options and exercisable options at July 31, 2013 is 4.78 years.

The aggregate intrinsic value of options outstanding and exercisable as of July 31, 2013, 2012 and 2011 is as follows:

 

    

    2013    

          2012              2011      

Aggregate intrinsic value of options outstanding and expected to vest

    $ 2,399       $ 966       $ 647   

Aggregate intrinsic value of options exercisable

    $ 2,399       $ 738       $ 647   

 

The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. Assumptions utilized in the model are evaluated when awards are granted. Forfeiture assumptions are revised as necessary to reflect actual experience. The fair value of the stock options is based upon the market price of the underlying common stock as of the date of the grant, reduced by the present value of estimated future dividends and risk-free interest rates. The risk-free rate for periods within the contractual life of the option is based on the U.S. treasury security rate estimated for the expected life of the options at the date of grant. Expected volatilities are based on the historical volatility of the Company’s stock. The expected term of the options represents the period of time that options granted are expected to be outstanding and is estimated using the Company’s historical exercise and termination behavior.

The weighted average fair value of options granted in fiscal 2011 was $10.80, as calculated by the Black-Scholes method. There were no option grants during fiscal 2013 or fiscal 2012. The assumptions used in determining the fair value of the options granted during fiscal 2011 are as follows:

 

Grant Date   July 19, 2011     March 14, 2011  

Expected volatility

     46%        46%   

Expected life of grant

     6 years        6 years   

Risk-free interest rate

     1.8%        2.3%   

Expected dividend rate

     1.8%        1.2%   

In fiscal years 2013, 2012 and 2011, the Company recorded expenses of $393, $645 and $2,707, respectively, for stock option awards. As of July 31, 2013, there will be no future compensation costs related to existing stock options.

Cash received from stock option exercises for the fiscal years ended July 31, 2013, 2012 and 2011 was $5,845, $1,428 and $1,047, respectively. The total intrinsic value of stock options exercised in fiscal years 2013, 2012 and 2011 was $7,502, $931 and $1,551, respectively.

The Company recognized a tax benefit related to stock based compensation expense of $144, $224 and $1,172 in fiscal 2013, 2012 and 2011, respectively.

During fiscal 2013, stock options of 498,412 were exercised at an aggregate exercise price of $14,267. Of the 498,412 options exercised during fiscal 2013, 314,000 were done so on a cashless basis under which 63,464 shares were issued. The shares withheld as a result of the cashless exercise included the number of shares necessary to cover the exercise price as well as the employee withholding tax related to the exercise, which was then paid by the Company on the employees’ behalf in the aggregate amount of $2,009. Exercises of options are satisfied with the issuance of new shares from authorized shares.

Stock Awards – There was no restricted stock activity under the 2010 Equity and Incentive Plan in fiscal 2011, and a summary of restricted stock award activity under this Plan for fiscal 2013 and fiscal 2012 is as follows:

 

 

     2013      2012  
    

Shares

     

Weighted-
Average Grant

Date Fair Value

     

Shares

     

Weighted-
Average Grant

Date Fair Value

  

Nonvested, beginning of year

      10,041             $ 29.46             –             $ –       

Granted

      9,498             32.36                   10,041             29.46       

Vested

      (2,009)         29.46             –         –       

Forfeited

      –         –             –         –       
  

 

 

        

 

 

     

Nonvested, end of year

            17,530             $ 31.03             10,041             $ 29.46       
  

 

 

        

 

 

     

In fiscal 2013, 2012 and 2011, the Company recorded expense for restricted stock awards under this plan of $133, $43 and $0, respectively. At July 31, 2013, there was $405 of total unrecognized compensation costs related to restricted stock awards that is expected to be recognized over a weighted average period of 3.95 years. This restricted stock vests evenly over 5 years from the date of grant.

During 2013, the Compensation and Development Committee of the Board (“the Committee”) approved a program to award restricted stock units to certain employees at the operating subsidiary and corporate levels. The first awards under this program were granted in the first quarter of fiscal 2013 based on fiscal year 2012 performance. Additionally, the Committee granted restricted stock units during fiscal 2013 in conjunction with an offer of employment. The Committee also approved certain awards related to fiscal year 2013 performance that will be granted in fiscal 2014. The employee restricted stock units will vest, and shares of common stock will be issued, in equal installments on the first, second and third anniversaries of the date of grant. The Nominating and Governance Committee of the Board awarded restricted stock units to Board members that will vest, and shares of common stock will be issued, on the first anniversary of the date of the grant. Total expense recognized in fiscal 2013 for restricted stock unit awards was $2,290.

 

A summary of restricted stock unit activity during fiscal 2013 is included below:

 

     Restricted Stock
Units		      Weighted-
Average Grant
Date Fair Value		  

Nonvested, beginning of year

      –             $ –       

Granted

            143,069             38.01       

Vested

      –         –       

Forfeited

      (3,794)         36.32       
  

 

 

     

Nonvested, end of year

      139,275             $ 38.06       
  

 

 

     

Total non-cash compensation expense recognized for stock option awards, restricted stock awards and restricted stock unit awards in fiscal 2013, 2012 and 2011 was $2,816, $688 and $2,707, respectively.