v2.4.0.6
Stock-Based Compensation
 6 Months Ended
Dec. 31, 2011
Stock-Based Compensation [Abstract]  
Stock-Based Compensation

3. Stock-Based Compensation

The Amended and Restated 2005 Long-Term Incentive Plan (the “2005 Plan”) is the only equity-based compensation plan under which future awards may be made to employees of the Company and non-employee directors of R.G. Barry Corporation other than the employee stock purchase plan, currently inactive, in which only employees of the Company are eligible to participate. The Company’s previous equity-based compensation plans remained in effect with respect to the then outstanding awards following the original approval of the 2005 Plan. By shareholder action at the 2009 Annual Meeting of Shareholders, the 2005 Plan was amended to provide for an additional 500,000 common shares to be made available for future awards under the 2005 Plan (the “Amended 2005 Plan”).

The Amended 2005 Plan provides for the granting of nonqualified stock options (“NQs”), incentive stock options (“ISOs”) that qualify under Section 422 of the Internal Revenue Code, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), stock grants, stock units and cash awards, each as defined in the Amended 2005 Plan. Grants of restricted or unrestricted stock, RSUs and cash awards may also be performance-based awards, as defined in the Amended 2005 Plan.

During the first quarter of fiscal 2012, the Company granted performance-based RSUs to certain members of management; no similar performance-based stock awards were granted in the second quarter of fiscal 2012 or in the first half of fiscal 2011. 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 units eligible for settlement will be determined when the annual financial results are finalized by the Company and one-third of those units will be settled. 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 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.

Performance-based RSUs will be settled 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 expected diluted earnings per share by the Company for fiscal 2012, the number of total eligible performance-based RSUs was computed at 73,560, 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 during the first quarter of fiscal 2012; no similar grants were made during the second quarter of fiscal 2012. During the first quarter of fiscal 2011, the Company granted 124,500 time-based RSUs which vest at the end of five-years but will be eligible for accelerated vesting of 20% of the award if pre-set levels of pre-incentive, pre-tax income for a particular year are achieved by the Company; no similar grants were made in the second quarter of fiscal 2011 or the first half of fiscal 2012. Where stock-based compensation is granted in the form of RSUs, the fair value for such grants is based on the market price of the Company’s common shares at the date of grant and is adjusted for projected forfeitures anticipated with respect to such awards.

Consistent with its non-employee directors compensation policy, the Company also awarded an aggregate of 20,370 and 25,100 unrestricted common shares with immediate vesting to the non-employee directors of R.G. Barry Corporation during the second quarter of fiscal 2012 and the second quarter of fiscal 2011, respectively. The fair value of these awards of common shares was $257 for the second quarter of fiscal 2012 and the second quarter of fiscal 2011, respectively. The fair value was based on the market price of the Company’s common shares at the date of grant for each award, and was included as part of the total stock-based compensation expense cited below.

Under the provisions of FASB ASC 718, the Company recognized, as part of selling, general and administrative expenses, $613 and $873 of stock-based compensation expense for the second quarter and the first half of fiscal 2012, respectively. The Company recognized $467 and $766 of stock-based compensation expense for the second quarter and the first half of fiscal 2011, respectively.

The Company did not grant any stock options during the first half of fiscal 2012 or the first half of fiscal 2011, but has granted stock options historically at times to certain members of management and non-employee directors. Total compensation cost of stock options granted but not yet vested as of December 31, 2011, was approximately $29, which will be recognized over a weighted-average period of approximately two years.

During the second quarter of fiscal 2012 and the second quarter of fiscal 2011, the Company recognized gross excess tax benefits of $60 and $24, respectively. During the first half of fiscal 2012 and the first half of fiscal 2011, the Company recognized gross excess tax benefits of $72 and $122, respectively, as additional paid-in capital under the provisions of FASB ASC 718 related to the vesting of RSUs and exercises of stock options.

Activity with respect to stock options for the first half of fiscal 2012 was as follows:

 

      September 30,       September 30,       September 30,  
    Number of     Number of     Weighted-  
    common shares     common shares     Average  
    subject to ISOs     subject to NQs     exercise price  

Outstanding at July 2, 2011

     22,700       112,800     $ 6.63  

Granted

     —         —         —    

Exercised

     —         62,800       6.58  

Expired/Cancelled

     —         —         —    
   

 

 

    

 

 

    

 

 

  

Outstanding at December 31, 2011

     22,700       50,000     $ 6.67  
   

 

 

    

 

 

    

 

 

  

Options exercisable at December 31, 2011

     22,700       37,700          
   

 

 

    

 

 

          

Activity with respect to time-based RSUs for the first half of fiscal 2012 was as follows:

 

      September 30,       September 30,  
    Number of
common shares
underlying RSUs		     Grant Date
Fair Value		  

Nonvested at July 2, 2011

     319,900     $ 8.24  

Granted

     23,550       10.51  

Vested

     (4,200 )      6.18  

Forfeited/Cancelled

     (6,500 )      7.92  
   

 

 

    

 

 

  

Nonvested at December 31, 2011

     332,750     $ 8.43  
   

 

 

    

 

 

  

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

 

      September 30,       September 30,  
    Number of
common shares
underlying RSUs		     Grant Date
Fair Value		  

Nonvested at July 2, 2011

     —         —    

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

     36,780     $ 10.51  

Vested

     —         —    

Forfeited/Cancelled

     —         —    
   

 

 

    

 

 

  

Nonvested at December 31, 2011

     36,780     $ 10.51  
   

 

 

    

 

 

  

During the first half of fiscal 2012, an aggregate of 36,780 performance-based RSUs with future settlement at vesting to be made in cash were granted (based on expected diluted earnings per share by the Company for fiscal 2012) and accounted for as cash settlement awards, 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.

 

Total compensation cost of time-based and performance-based compensation awards not yet vested, as of December 31, 2011 was as follows:

 

      September 30,       September 30,  
    Unrecognized
Compensation Cost		     Weighted-average
period in years		  

Time-based RSU awards

   $ 1,807       2-3  

Performance-based RSU awards (accounted for as equity award)

     197       1-2  

Performance-based RSU awards (accounted for as cash settlement award)

     268       2-3  

The aggregate intrinsic value, as defined in FASB ASC 718, of stock options exercised and RSUs vested during the first half of fiscal 2012 and the first half of fiscal 2011 was $437 and $1,320, respectively.