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Shareholders' Equity
 12 Months Ended
Jun. 30, 2012
Shareholders' Equity [Abstract]  
Shareholders' Equity
(12) Shareholders’ Equity

As of June 30, 2012, there were approximately 106 employees and seven non-employee directors who were eligible to participate in the 2005 Plan.

The 2005 Plan authorizes the issuance of 1,000,000 common shares, plus:

 

  •  

the number of common shares that were authorized to be the subject of awards under the 1997 Incentive Stock Plan (the “1997 Plan”) and the 2002 Stock Incentive Plan (the “2002 Plan”), but which had not yet been granted as of May 20, 2005; and

 

  •  

any common shares underlying awards granted under the 1997 Plan and the 2002 Plan, which are forfeited after May 20, 2005.

At June 30, 2012, the number of common shares available for future grants pursuant to the 2005 Plan was 373,200.

The selection of participants and the nature and size of awards granted under the 2005 Plan is within the discretion of the Compensation Committee of R.G. Barry Corporation’s Board of Directors (the “Committee”), in the case of grants to employees of the Company or the full Board of Directors, in the case of grants to non-employee directors of R.G. Barry Corporation. The 2005 Plan provides for the following types of awards, each as defined in the 2005 Plan:

 

  •  

nonqualified stock options (“NQs”) and incentive stock options (“ISOs”) that qualify under Section 422 of the Internal Revenue Code of 1986, as amended;

 

  •  

stock appreciation rights;

 

  •  

restricted stock and restricted stock units (“RSUs”); and

 

  •  

stock grants, stock units and cash awards.

Grants of restricted stock, RSUs, stock units and cash awards may, as determined by the Committee or the full Board of Directors, as appropriate, also be performance-based awards, as defined in the 2005 Plan.

 

If an award granted under the 2005 Plan is forfeited, cancelled, terminated, relinquished, exchanged or otherwise settled without the issuance of common shares or the payment of cash equal to the difference between the fair market value of the award and any exercise price, the common shares associated with that award will be available for future grants. The maximum number of common shares with respect to which awards may be issued under the 2005 Plan to any individual during any calendar year is 200,000. The common shares issued pursuant to the 2005 Plan may consist of authorized and unissued common shares or treasury shares.

Prior to the 2005 Plan, the Company had various equity-based compensation plans, under which ISOs and NQs had been granted, some of which remain outstanding. All outstanding ISOs and NQs are currently exercisable for periods of up to ten years from the date of grant at exercise prices of not less than the fair market value of the underlying common shares at the grant date.

The Company recorded, as part of selling, general and administrative expenses, $1,555 of stock-based compensation expense for fiscal 2012. This amount includes expense from all ISOs, NQs and RSUs granted whether to be settled with common shares issuance or by equivalent cash payment, and the value of common shares issued for services rendered by members of the Company’s Board of Directors.

The total unrecognized compensation cost of RSUs granted but not yet vested as of June 30, 2012 was approximately $1,191. The Company expects to recognize the total remaining compensation cost with respect to these RSUs over the weighted-average period of approximately two years.

Total unrecognized compensation cost of stock options granted, but not yet vested, as of June 30, 2012 was $23. This amount is expected to be recognized over the remaining pro-rata vesting period of three years associated with these stock option grants. The following assumptions were used to value these stock options:

 

         

Dividend yield

     2.6 % 

Expected volatility

     48.4 % 

Risk-free interest rate

     1.4 % 

Expected term

     3 years  

The risk-free interest rate was based on the United States Treasury daily yield curve rates for the expected term of the stock options. The expected volatility was based on the historical volatility of the Company’s common shares.

 

Plan activity for grants under the 2005 Plan and the other equity-based compensation plans under which ISOs and NQs have been granted was as follows:

 

                         
    Number of
common  shares
subject to ISOs		     Number of
common  shares
subject to NQs		     Weighted-
average
exercise price		  

Outstanding at June 27, 2009

     117,000       146,200     $ 5.21  
       

Granted

     —         —         —    

Exercised

     (81,000 )      (40,700 )      4.03  

Expired/Cancelled

     —         —         —    
   

 

 

    

 

 

    

 

 

  

Outstanding at July 3, 2010

     36,000       105,500     $ 6.11  
       

Granted

     —         12,300       11.36  

Exercised

     (13,300 )      (5,000 )      5.85  

Expired/Cancelled

     —         —         —    
   

 

 

    

 

 

    

 

 

  

Outstanding at July 2, 2011

     22,700       112,800     $ 6.63  
       

Granted

     —         —         —    

Exercised

     (15,200 )      (94,200 )      6.43  

Expired/Cancelled

     —         (1,600 )      12.55  
   

 

 

    

 

 

    

 

 

  

Outstanding at June 30, 2012

     7,500       17,000     $ 7.12  
   

 

 

    

 

 

    

 

 

  

Options exercisable at June 30, 2012

     7,500       9,800          
   

 

 

    

 

 

          

 

                                         
    Options outstanding     Options exercisable  

Range of

exercise

prices

   Number
outstanding  at
June 30, 2012		     Weighted-
average
remaining
contractual
life (years)		     Weighted-
average
exercise
price		     Number
exercisable  at
June 30, 2012		     Weighted-
average
exercise
price		  

$ 2.51 – 5.00

     13,800       1.0     $ 3.96       13,800     $ 3.96  

5.01 – 10.00

     —         —         —         —         —    

10.01 – 15.00

     10,700       8.6       11.18       3,500       11.18  
   

 

 

                    

 

 

          
      24,500                       17,300          
   

 

 

                    

 

 

          

The intrinsic values of the stock options exercisable and outstanding at the end of fiscal 2012 were $141 and $158, respectively. The intrinsic value of stock options exercised during fiscal 2012 was $733.

At the end of fiscal 2012, fiscal 2011 and fiscal 2010, the stock options outstanding under these equity-based compensation plans were held by 5, 9 and 8 individuals, respectively, and had expiration dates ranging from 2012 to 2021.

 

Consistent with its non-employee director’s compensation policy, the Company also awarded an aggregate of 20,370 common shares (i.e., unrestricted stock) with immediate vesting to the non-employee directors of R.G. Barry Corporation during the second quarter of fiscal 2012. The aggregate fair value of this award of common shares was $257 based on the market price of the Company’s common shares at the date of grant, and was included as part of the total stock-based compensation expense cited above.

In fiscal 2012, the Company granted 550 time-based RSUs to a member of management. Upon vesting, the RSUs will be settled in an equivalent number of common shares. The RSUs awarded to the member of management will vest in full on the fifth anniversary of the date of the award, although 20% of the RSUs may vest on each of the first four anniversaries of the date of the award if the Company meets certain financial performance goals. The intrinsic value of RSUs that vested during fiscal 2012 was $47.

During fiscal 2012, the Company granted performance-based RSUs to certain members of management. Each performance-based RSU is equivalent to one common share. The number of RSUs eligible for settlement to participants is ultimately based on the level of diluted earnings per share achieved by the Company, at certain established minimum, target and maximum levels, for the fiscal year in which such performance-based RSUs are granted. If the minimum level of diluted earnings per share is not achieved for the fiscal year of grant, all of the performance-based RSUs underlying the award will be forfeited. If diluted earnings per share exceed the minimum level, the number of RSUs underlying the award eligible for settlement will be determined when the annual financial results are finalized by the Company and one-third of those RSUs will be settled. For fiscal 2012, the Company’s diluted earnings per share reported resulted in the maximum level of RSUs eligible for settlement. The remaining performance-based RSUs eligible for settlement will vest to the participants based on continued service rendered to the Company over the following two-fiscal year periods, with annual pro rata vesting based on employment during the relevant fiscal year and settlement occurring at the end of each fiscal year. Except in instances of death or retirement where pro rata vesting would be applied, participants must be employed by the Company at the time of settlement in order to be vested in any portion of the award otherwise to be settled.

The performance-based RSUs described in the preceding paragraph will be settled, if eligible, through an issuance of common shares for 50% of the performance-based RSUs and through cash payment for the other 50% of the performance-based RSUs valued at the fair value of a common share at the time of settlement. Based on the diluted earnings per share achieved by the Company for fiscal 2012, the number of total eligible performance-based RSUs was computed at 105,200 of which 50% was accounted for as an equity award and 50% was accounted for as a cash settlement award. The fair value of the equity award was determined based on the closing market price of a common share at the date of grant of $10.51. Similarly, the fair value of the cash settlement award was initially based on the market price of a common share at the date of grant but is subject to periodic revaluation as changes occur in the market price of a common share over the time period of the award.

In addition, consistent with its employee compensation policy, the Company granted an aggregate of 23,550 time-based RSUs, which vest in equal annual installments over three years, to certain members of management.

At the end of fiscal 2012, fiscal 2011 and fiscal 2010, RSUs outstanding under the 2005 Plan were held by 27, 26 and 38 employees, respectively, and had vesting dates ranging from 2013 to 2017. These RSU vesting dates were subject to partial acceleration on an annual basis if certain Company financial performance objectives were met for a fiscal year.

The following is a summary of the status of the Company’s time-based RSUs as of June 30, 2012, July 2, 2011 and July 3, 2010 and activity during the fiscal year then ended:

 

                                                 
    2012     2011     2010  
    RSUs     Weighted
average
grant-
date fair
value		     RSUs     Weighted
average
grant-
date fair
value		     RSUs     Weighted
average
grant-
date fair
value		  

Unvested at beginning of the year

     319,900     $ 8.24       314,000     $ 7.49       319,500     $ 6.86  

Granted

     24,100       10.51       124,500       9.92       145,400       8.08  

Vested

     (4,200 )      6.46       (94,600 )      8.05       (119,000 )      6.56  

Forfeited/Cancelled

     (14,900 )      8.40       (24,000 )      7.80       (31,900 )      7.25  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Unvested at the end of the year

     324,900     $ 8.43       319,900     $ 8.24       314,000     $ 7.49  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Activity for fiscal 2012 with respect to performance-based RSUs, with future settlement at vesting in common shares, was as follows:

 

                 
    Number of
common shares
underlying RSUs		     Grant Date
Fair Value		  

Unvested at July 2, 2011

     —         —    

Granted, based on diluted earnings per share for the Company for fiscal 2012

     52,600     $ 10.51  

Vested

     —         —    

Forfeited/Cancelled

     (700 )      —    
   

 

 

    

 

 

  

Unvested at June 30, 2012

     51,900     $ 10.51  
   

 

 

    

 

 

  

During fiscal 2012, an aggregate of 52,600 performance-based RSUs with future settlement at vesting to be made in cash were granted and 700 were forfeited. These grants to various members of management were accounted for as cash settlement awards (based on expected diluted earnings per share by the Company for fiscal 2012) for which the fair value of the awards is subject to initial valuation and subsequent periodic revaluation at the end of each reporting period based on the corresponding market price of a common share of the Company.