Note 12. Shareholders’ Equity

The monthly dividend of $0.005 is authorized through December 2013 and will be considered for continuation at that time by the Board. Payment of cash dividends is within the discretion of the Company’s Board of Directors and is dependent on earnings, operations, capital requirements, general financial condition of the Company and general business conditions. On a per share basis, the holders of the class C common stock and the nonvoting class A common stock participate equally in dividends as declared by the Company’s Board of Directors.

During fiscal year 2013, the Company repurchased 55,052 class A shares on the open market using cash of $173,608. During the fiscal years ended June 30, 2012 and 2011, the Company did not purchase any of its class A common stock.

The Company did not grant any shares of class A common stock to employees during fiscal year 2013. During the years ended June 30, 2012, and 2011, the Company granted 15,600 and 35,300 shares, respectively, of class A common stock to certain employees at a weighted average fair value on grant date of $4.73 and $8.12, respectively. Grants vest immediately after issuance.

The Company granted 3,600; 3,600; and 3,300 shares of class A common stock at a weighted average fair value of $4.16, $6.65, and $8.10 to its non-employee Directors in fiscal years 2013, 2012, and 2011, respectively. Grants vest immediately after issuance.

Shareholders of class C shares are allowed to convert to class A. During fiscal years 2013, 2012, and 2011, 2,516; 60; and 0 shares, respectively, were converted from class C to class A.

In November 1989, the Board of Directors adopted the 1989 Non-Qualified Stock Option Plan (“1989 Plan”), amended in December 1991, which provides for the granting of options to purchase 1,600,000 shares of the Company’s class A common stock to directors, officers and employees of the Company and its subsidiaries. Options issued under the 1989 Plan vest six months from the grant date or 20 percent on the first, second, third, fourth, and fifth anniversaries of the grant date. Options issued under the 1989 Plan expire ten years after issuance. As of June 30, 2013, there were no options outstanding under the 1989 Plan.

In April 1997, the Board of Directors adopted the 1997 Non-Qualified Stock Option Plan (“1997 Plan”), which provides for the granting of stock appreciation rights (SARs) and/or options to purchase 400,000 shares of the Company’s class A common stock to directors, officers, and employees of the Company and its subsidiaries. Options issued under the 1997 Plan expire ten years after issuance. No options were granted in fiscal year 2013. One option for 5,000 shares was granted in fiscal year 2012 with a fair value, net of tax, of $8,052. The option will vest over five years with 20 percent vesting on each anniversary date. No options were granted in fiscal year 2011.

The estimated fair value of options granted is amortized to expense over the options’ vesting period. The fair value of these options is estimated at the date of the grant using a Black-Scholes option pricing model with the following assumptions for the option granted in fiscal year 2012: expected volatility factor based on historical volatility of 49.9 percent, risk-free interest rate of 2.4 percent and an expected life of 5.67.

Stock option transactions under the various employee stock option plans for the past three fiscal years are summarized below:


	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Yrs		Aggregate Intrinsic Value (net of tax)
Outstanding June 30, 2010		55,300	$	19.21
Granted		-		n/a
Exercised		-		n/a
Forfeited		30,000	$	19.06

Outstanding June 30, 2011		25,300	$	19.40
Granted		5,000	$	6.54
Exercised		-		n/a
Forfeited		1,300	$	22.63

Outstanding June 30, 2012		29,000	$	17.03
Granted		-		n/a
Exercised		-		n/a
Forfeited		-		n/a

Outstanding June 30, 2013		29,000	$	17.03		5.04	$	200,336

As of June 30, 2013, 2012, and 2011, exercisable employee stock options totaled 25,000; 22,000; and 20,180 shares and had weighted average exercise prices of $18.71, $19.21, and $19.78 per share, respectively.

Class A common stock options outstanding and exercisable under the employee stock option plans at June 30, 2013, were as follows:


	Options Outstanding								Options Exercisable
	Date of Option Grant		Number Outstanding		Remaining Life in Years		Weighted Average Exercise Price ($)		Number Exercisable		Weighted Average Option Price ($ )
1997 Plan Class A		06/20/07		2,000		3.97	$	24.74		2,000	$	24.74
		10/03/07		20,000		4.25	$	19.36		20,000	$	19.36
		10/07/09		2,000		6.27	$	12.31		2,000	$	12.31
		08/23/11		5,000		8.15	$	6.54		1,000	$	6.54

				29,000		5.04	$	17.03		25,000	$	18.71