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Stock-Based Compensation
 3 Months Ended
Sep. 30, 2012
Stock-Based Compensation [Abstract]  
Stock-Based Compensation

Note 7 –Stock-Based Compensation

Our shareholders approved the adoption of and subsequent amendments to the Lancaster Colony Corporation 2005 Stock Plan (the “2005 Plan”). The 2005 Plan reserved 2,000,000 common shares for issuance to our employees and directors, and all awards granted under the 2005 Plan will be exercisable at prices not less than fair market value as of the date of the grant. The vesting period for awards granted under the 2005 Plan varies as to the type of award granted, but generally these awards have a maximum term of five years.

Stock-Settled Stock Appreciation Rights

We use periodic grants of stock-settled stock appreciation rights (“SSSARs”) as a vehicle for rewarding certain employees with long-term incentives for their efforts in helping to create long-term shareholder value. We calculate the fair value of SSSARs grants using the Black-Scholes option-pricing model. Our policy is to issue shares upon SSSARs exercise from new shares that had been previously authorized. There were no grants of SSSARs during the three months ended September 30, 2012 and 2011, and no SSSARs vested during these periods.

We recognize compensation expense over the requisite service period. Compensation expense was reflected in Cost of Sales or Selling, General and Administrative Expenses based on the grantees’ salaries expense classification and was allocated to each segment appropriately. We recorded tax benefits and gross windfall tax benefits related to SSSARs. These windfall tax benefits were included in the financing section of the Condensed Consolidated Statements of Cash Flows. The following table summarizes SSSARs compensation expense and tax benefits recorded:

 

 

 

 

 

 

 

 

Three Months Ended

 

September 30,

 

2012

 

2011

 

 

 

 

 

 

Compensation expense

$
461 

 

$
280 

Tax benefits

$
161 

 

$
98 

Intrinsic value of exercises

$
690 

 

$
13 

Gross windfall tax benefits

$
241 

 

$
5 

 

The following table summarizes the activity relating to SSSARs granted under the 2005 Plan for the three months ended September 30, 2012:

 

 

 

 

 

 

 

 

 

 

 

 

Number of Rights

 

 

Weighted Average Exercise Price

 

Weighted Average Remaining Contractual Life in Years

 

 

Aggregate Intrinsic Value

 

 

 

 

 

 

 

 

 

 

Outstanding at beginning of period
446 

 

$
60.55 

 

 

 

 

 

Exercised
(51)

 

$
50.06 

 

 

 

 

 

Granted

 -

 

$

 -

 

 

 

 

 

Forfeited

 -

 

$

 -

 

 

 

 

 

Outstanding at end of period
395 

 

$
61.90 

 
3.48 

 

$
4,483 

Exercisable and vested at end of period
93 

 

$
53.99 

 
2.30 

 

$
1,786 

Vested and expected to vest at end of period
384 

 

$
61.82 

 
3.44 

 

$
4,388 

 

 

At September 30, 2012, there was approximately $1.5 million of unrecognized compensation expense related to SSSARs that we will recognize over a weighted-average period of approximately 1.88 years.

Restricted Stock

We use periodic grants of restricted stock as a vehicle for rewarding our nonemployee directors and certain employees with long-term incentives for their efforts in helping to create long-term shareholder value. There were no grants of restricted stock during the three months ended September 30, 2012 and 2011, and no restricted stock vested during these periods.

We recognize compensation expense over the requisite service period. Compensation expense was reflected in Cost of Sales or Selling, General and Administrative Expenses based on the grantees’ salaries expense classification and was allocated to each segment appropriately. We recorded tax benefits and gross windfall tax benefits related to restricted stock. Windfall tax benefits, if any, were included in the financing section of the Condensed Consolidated Statements of Cash Flows. The following table summarizes restricted stock compensation expense and tax benefits recorded:

 

 

 

 

 

 

 

 

Three Months Ended

 

September 30,

 

2012

 

2011

 

 

 

 

 

 

Compensation expense

$
410 

 

$
274 

Tax benefits

$
144 

 

$
96 

Gross windfall tax benefits

$
1 

 

$

 -

The following table summarizes the activity relating to restricted stock granted under the 2005 Plan for the three months ended September 30, 2012:

 

 

 

 

 

 

Number of Shares

 

 

Weighted Average Grant Date Fair Value

 

 

 

 

 

Unvested restricted stock at beginning of period
62 

 

$
63.25 

Granted

 -

 

$

 -

Vested

 -

 

$

 -

Forfeited

 -

 

$

 -

Unvested restricted stock at end of period
62 

 

$
63.27 

 

 

At September 30, 2012, there was approximately $1.7 million of unrecognized compensation expense related to restricted stock that we will recognize over a weighted-average period of approximately 1.99 years.