XML 76 R18.htm IDEA: XBRL DOCUMENT
v2.4.0.6

Note 11 - Share-Based Compensation | 12 Months Ended
--- | ---
Jun. 30, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | (11) Share-Based Compensation For the twelve months ended June 30, 2012, 2011, and 2010, share-based compensation expense totaled $1.7 million, $0.9 million, and $2.3 million respectively. These amounts have been included in the Consolidated Statements of Operations within selling, general and administrative expenses. During the twelve months ended June 30, 2012, 2011, and 2010, we recognized related tax benefits associated with our share-based compensation arrangements totaling $0.6 million, $0.3 million and $0.8 million, respectively (before valuation allowances). Such amounts have been included in the Consolidated Statements of Operations within income tax expense. We estimate, as of the date of grant, the fair value of stock options awarded using the Black-Scholes option-pricing model. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs, including anticipated changes in the underlying stock price (i.e. expected volatility) and option exercise activity (i.e. expected life). Expected volatility is based on the historical volatility of our stock. The risk-free rate of return is based on the U.S. Treasury bill rate for the term closest matching the expected life of the grant. The dividend yield is based on the annualized dividend rate at the grant date relative to the grant date stock price. The expected life of options granted, which represents the period of time that the options are expected to be outstanding, is based, primarily, on historical data. The weighted average assumptions used for fiscal years ended June 30 are noted in the following table:
|  | 2012 |  |  | 2011 |  |  | 2010 |
Volatility |  |  | 45.1 | % |  |  | 59.5 | % |  |  | 43.7 | %
Risk-free rate of return |  |  | 1.92 | % |  |  | 0.61 | % |  |  | 3.05 | %
Dividend yield |  |  | 2.00 | % |  |  | 1.16 | % |  |  | 1.67 | %
Expected average life (years) |  |  | 9.6 |  |  |  | 1.8 |  |  |  | 7.8 |
At June 30, 2012, we had 505,696 shares of common stock available for future issuance pursuant to the 1992 Stock Option Plan (the “Plan”). The maximum number of shares of common stock reserved for issuance under the Plan is 6,487,867 shares. Following is a description of grants made under the Plan. Stock Option Awards The Plan provides for the grant of non-compensatory stock options to eligible employees and non-employee directors. Stock options granted under the Plan are non-qualified under Section 422 of the Internal Revenue code and allow for the purchase of shares of our common stock. The Plan also provides for the issuance of stock appreciation rights ("SARs") on issued options, however, no SARs have been issued as of June 30, 2012. The awarding of such options is determined by the Compensation Committee of the Board of Directors after consideration of recommendations proposed by the Chief Executive Officer. Option awards are generally granted with an exercise price equal to the market price of our common stock at the date of grant, vest ratably over a specified service period (4 years for awards to employees; 2 years for awards to independent directors), and have a contractual term of 10 years. Effective October 1, 2011, the Company and M. Farooq Kathwari, our President and Chief Executive Officer, entered into a new employment agreement (the "Agreement"). Pursuant to the terms of the Agreement, Mr. Kathwari was awarded on October 1, 2011, (i) options to purchase 300,000 shares of our common stock at an exercise price of $13.61 which vest ratably over a 5-year period on each June 30, unless earlier vested, in certain circumstances, in accordance with the terms of the Agreement. During fiscal 2012, the Company awarded options to purchase an aggregate of 36,000 shares of our common stock to certain executives other than Mr. Kathwari, which vest in four equal annual installments on the grant date anniversary. All options were issued at the closing stock price on each grant date, and have a contractual term of 10 years. A summary of stock option activity occurring during the fiscal year ended June 30, 2012 is presented below:
Options |  | Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Term (yrs) |  |  | Aggregate Intrinsic Value |
Outstanding - June 30, 2011 |  |  | 2,006,187 |  |  | $ | 29.91 |  |  |  |  |  |  |
Granted |  |  | 336,000 |  |  |  | 14.19 |  |  |  |  |  |  |
Exercised |  |  | (14,921 | ) |  |  | 15.09 |  |  |  |  |  |  |
Canceled (forfeited/expired) |  |  | (56,558 | ) |  |  | 33.78 |  |  |  |  |  |  |
Outstanding - June 30, 2012 |  |  | 2,270,708 |  |  |  | 27.58 |  |  |  | 3.6 |  |  | $ | 3,740,610 |
Exercisable - June 30, 2012 |  |  | 1,892,966 |  |  | $ | 30.22 |  |  |  | 2.6 |  |  | $ | 1,646,996 |
The weighted average grant-date fair value of options granted during fiscal 2012, 2011, and 2010 was $5.98, $1.70 and $5.17 respectively. The total intrinsic value of options exercised during 2012, 2011 and 2010 was $0.1 million, $0.0 million, and $0.0 million, respectively. As of June 30, 2012, there was $1.8 million of total unrecognized compensation cost related to nonvested options granted under the Plan. That cost is expected to be recognized over a weighted average period of 3.5 years. A summary of the nonvested shares as of June 30, 2012 and changes during the year then ended is presented below:
Options |  | Shares |  |  | Weighted Average Grant Date Fair Value |
Nonvested June 30, 2011 |  |  | 184,230 |  |  | $ | 4.41 |
Granted |  |  | 336,000 |  |  |  | 5.98 |
Vested |  |  | (137,938 | ) |  |  | 4.87 |
Canceled (forfeited/expired) |  |  | (4,550 | ) |  |  | 3.34 |
Nonvested at June 30, 2012 |  |  | 377,742 |  |  |  | 5.65 |
Restricted Stock Awards In connection with Mr. Kathwari’s October 10, 2007 employment agreement, he received on July 1, 2008 an award of 20,000 shares of restricted stock with vesting based on the performance of the Company's stock price during the three year periods subsequent to the award date as compared to the Standard and Poor’s 500 index. The measurement period ended on June 30, 2012, and 20,000 shares vested. On July 26, 2011, as a result of the Company’s performance, the Compensation Committee of the Company’s board of directors awarded Mr. Kathwari 30,000 service-based restricted shares, which vest in three equal annual installments on the grant date anniversary. Effective October 1, 2011, pursuant to the terms of the Agreement, Mr. Kathwari was awarded 105,000 shares of restricted stock, which vested ratably over a 5-year period on each June 30, unless earlier vested, in certain circumstances, in accordance with the terms of the Agreement. A summary of nonvested restricted share activity occurring during the fiscal year ended June 30, 2012 is presented below.
Restricted Awards |  | Shares |  |  | Weighted Average Grant Date Fair Value |
Nonvested - June 30, 2011 |  |  | 67,175 |  |  | $ | 13.05 |
Granted |  |  | 141,718 |  |  |  | 15.01 |
Vested |  |  | (65,827 | ) |  |  | 12.78 |
Canceled (forfeited/expired) |  |  | (1,000 | ) |  |  | 14.45 |
Nonvested - June 30, 2012 |  |  | 142,066 |  |  | $ | 15.12 |
As of June 30, 2012, there was $1.8 million of total unrecognized compensation cost related to restricted shares granted under the Plan. That cost is expected to be recognized over a weighted average period of 2.6 years. The total fair value of restricted shares vested during the fiscal years ending June 30, 2012 and 2011 was $1.4 million and $0.4 million respectively. Stock Unit Awards In connection with previous employment agreements, Mr. Kathwari was deemed to have earned 126,000 stock units. In the event of the termination of his employment, regardless of the reason for termination, Mr. Kathwari will receive shares of common stock equal to the number of stock units earned.

X
- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 93-6 -Paragraph 53 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 123R -Paragraph 64, 65, A240 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration