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Stock-Based Compensation
 12 Months Ended
Jun. 30, 2012
Stock-Based Compensation [Abstract]  
Stock-Based Compensation

Note 11—Stock-Based Compensation

Total stock-based compensation expense for the twelve months ended June 30, 2012, June 30, 2011, and June 30, 2010 was $3.5 million, $2.4 million and $2.1 million, respectively. Measured but unrecognized stock-based compensation expense at June 30, 2012 was $7.6 million, of which $6.6 million related to nonvested deferred shares and $1.0 million related to stock options. These amounts are expected to be recognized as expense over a weighted average period of 2.1 years. The recognized tax benefit related to the stock-based compensation expense for the 12 months ended June 30, 2012, June 30, 2011 and June 30, 2010 totaled $1.3 million, $0.9 million and $0.7 million, respectively.

Plan Information

The Company’s 2004 Stock Incentive Plan (“2004 Plan”) provides stock-based incentives for officers, other key employees and directors. Stock options, restricted stock units, stock appreciation rights and performance shares can be issued under this plan. Awards totaling 2,300,000 shares have been authorized under this plan, of which approximately 522,000 shares were available for grant at June 30, 2012.

Stock Options

Stock options are granted at the market value of the Company’s common stock on the grant date and expire after 10 years. The Company’s policy is to issue shares upon the exercise of stock options from its treasury shares, if available. The Company granted 282,450 shares of stock options in fiscal 2012 under our 2004 Plan. These stock options will cliff vest three years after the grant date. All other previously issued stock options have vested.

 

Stock option activity and related information for the year ended June 30, 2012 is as follows:

 

                                 
    Number of
Options		     Weighted-Average
Remaining
Contractual Life		     Weighted-Average
Exercise Price		     Aggregate
Intrinsic Value		  
          (Years)           (In thousands)  

Outstanding at June 30, 2011

     292,180       3.2     $ 8.34          

Granted

     282,450             $ 10.19          

Exercised

     (26,500 )            $ 6.29     $ 120  
                           

 

 

  

Cancelled

     (57,090 )            $ 10.27          
   

 

 

                          

Outstanding at June 30, 2012

     491,040       5.5     $ 9.29     $ 1,002  
   

 

 

                    

 

 

  

Vested or expected to vest at June 30, 2012

     484,484       5.5     $ 9.28     $ 993  
   

 

 

                    

 

 

  

Exercisable at June 30, 2012

     265,640       2.3     $ 8.53     $ 744  
   

 

 

                    

 

 

  

The Company uses the Black-Scholes option pricing model to estimate grant date fair value for each stock option granted. Expected volatility is based on the historic volatility of the Company’s stock. The risk-free rate is based on the applicable United States Treasury Note rate. The expected life of the option is based on historical and expected future exercise behavior.

Assumptions used to calculate the fiscal 2012 grant date fair value and the fair value calculated was as follows:

 

         
    2012  

Grant date fair value

   $ 5.61  

Risk-free interest rate

     0.88 % 

Expected volatility

     66.19 % 

Expected life in years

     5.00  

Expected dividend yield

     —    

The total intrinsic value of stock options exercised during fiscal 2012, 2011, and 2010 was $0.1 million, $0.2 million and $0.2 million, respectively.

The following table summarizes information about stock options at June 30, 2012:

 

                                                 
    Stock Options Outstanding     Stock Options Exercisable  

Range of Exercise Price

   Options
Outstanding		     Weighted-
Average
Exercise Price		     Weighted-
Average
Remaining
Contractual Life		     Options
Exercisable		     Weighted-
Average
Exercise Price		     Weighted-
Average
Remaining
Contractual Life 		 
                (Years)                 (Years)  

$2.13 – $  3.70

     16,600     $ 3.70       0.3       16,600     $ 3.70       0.3  

  4.60 –     5.49

     81,900       4.79       2.5       81,900       4.79       2.5  

  8.93 –   12.20

     392,540       10.47       6.4       167,140       10.85       2.3  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

$2.13 – $12.20

     491,040     $ 9.29       5.5       265,640     $ 8.53       2.3  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Nonvested Deferred Shares

The Company has issued nonvested deferred shares under the following types of arrangements:

 

  •  

Time based awards—Employee awards generally vest in four or five year equal annual installments beginning one year after the grant date. Director awards cliff vest on the earlier of three years or upon retirement from the Board.

 

  •  

Performance based awards—These awards vest three years after the grant date only if actual performance meets or exceeds established performance criteria. The payout is pro-rated based on actual performance and can range from zero to one hundred percent of the original award. These awards also provide for an additional award of up to 50% of the original award in the form of phantom shares. The phantom share awards do not vest unless certain stretch financial targets are achieved and are settled in cash. As of June 30, 2012, there are approximately 43,000 performance based shares that are scheduled to vest in the second quarter of fiscal 2013. However, attainment of the performance criteria is considered remote; therefore, no expense has been recognized on these awards.

 

  •  

Market based awards—These awards vest three years after the grant date if total shareholder return on the Company’s common stock achieves certain levels when compared to the total shareholder return of a peer group of companies as selected by the Compensation Committee of the Board of Directors. The payout is pro-rated and can range from zero to one hundred percent of the original award. These awards also provide for an additional award of up to 50% of the original award in the form of phantom shares. The phantom share awards are settled in cash and do not vest unless the total shareholder return on the Company’s common stock is within the top ten percent of the total shareholder return of the peer companies. As of June 30, 2012, there are approximately 43,000 market based shares that are scheduled to vest in the second quarter of fiscal 2013. At the current time, we are recognizing stock compensation expense based on a target payment. The expense will be adjusted when the relative performance of the Company’s common stock is known or if warranted by other factors.

All awards vest upon the death or disability of the participant or upon a change of control of the Company.

Nonvested deferred share activity for the twelve months ended June 30, 2012 is as follows:

 

                 
    Shares     Weighted Average  Grant
Date Fair Value per Share		  

Nonvested shares at June 30, 2011

     957,008     $ 11.30  

Shares granted

     364,600     $ 9.99  

Shares vested and released

     (184,149 )    $ 12.36  

Shares cancelled

     (166,465 )    $ 11.33  
   

 

 

          

Nonvested shares at June 30, 2012

     970,994     $ 10.75  
   

 

 

          

There were 405,500 and 516,675 deferred shares granted in fiscal 2011 and 2010 with average grant date fair values of $10.57 and $9.74, respectively. There were 184,149, 126,428 and 165,291 deferred shares that vested and were issued in fiscal 2012, 2011 and 2010 with weighted average fair values of $10.23, $9.52 and $9.70 per share, respectively.