Share-Based Compensation

12 Months Ended

Mar. 31, 2011

Share-Based Compensation [Abstract]

SHARE-BASED COMPENSATION

14. SHARE-BASED COMPENSATION

The Company adopted an annual stock option plan in the year ended March 31, 2009. Under the stock option plan, the Company granted shares of its common stock to directors of the Company excluding outside directors and directors of the Company’s wholly owned subsidiary, Wacoal Corp., in the years ended March 31, 2011, 2010 and 2009. The Company believes that such awards better align the interests of its directors with those of its shareholders, by sharing both risk and return from fluctuations in stock prices and giving motivation to enhance its corporate value. The compensation cost is measured at fair value on the grant date. Options vest over one year in proportion to the service months of directors, and are exercisable from the day after the date of retirement up to (i) twenty years from the grant date or (ii) five years from the day after the date of retirement, whichever is earlier.

The fair value of the options is estimated by using the Black-Scholes option-pricing model with following assumptions.

Expected dividend yield is based on the actual payout of dividend in the last fiscal year and the closing price of the Company’s common stock on the grant date. Expected volatility is based on the historical volatility of the Company’s share over the most recent period commensurate with the expected term of the Company’s stock options. Risk-free interest rate is based on the Japanese government bonds yield curve in effect at the time of grant for a period commensurate with the expected term of the Company’s share options. Expected term of options granted is based on the average remaining service period of directors, assuming that those who are granted options will render service until the stated retirement date and they will exercise options immediately after their retirement.

	2011			2010			2009
Expected dividends		1.7	%		2.1	%		2.0	%
Expected volatility		31.5	%		30.6	%		24.7	%
Risk-free interest rate		0.2	%		0.5	%		1.0	%
Expected term	3.6		years	4.0		years	4.8		years

A summary of option activity under the Plan as of March 31, 2011, and changes for the year ended March 31, 2011, were as follows:

										Millions		Thousands of
			Yen		U.S. Dollars		Years			of Yen		U.S. Dollars
							Weighted-Average
			Weighted-Average				Remaining
	Shares		Exercise Price				Contractual Term			Aggregate Intrinsic Value
Outstanding as of April 1, 2010		102,000	¥	1	$	0.01
Granted		46,000		1		0.01
Exercised
Forfeited or expired
Outstanding as of March 31, 2011		148,000		1		0.01	17.0		years	¥	155	$	1,873
Exercisable as of March 31, 2011		15,000		1		0.01		4.0			16		193

The total intrinsic value of options exercised was ¥5 million for the year ended March 31, 2010. There were no options exercised for the years ended March 31, 2011 and 2009.

Total compensation costs recognized for the years ended March 31, 2011, 2010 and 2009 were ¥50 million ($604 thousand), ¥55 million and ¥54 million, respectively. The total recognized tax benefits related thereto for the years ended March 31, 2011, 2010 and 2009 were ¥20 million ($242 thousand), ¥22 million and ¥22 million, respectively.

The weighted-average grant date fair values of options granted for the years ended March 31, 2011, 2010 and 2009 were ¥1,081 ($13), ¥1,084 and ¥1,137, respectively.

As of March 31, 2011, there were ¥9 million ($109 thousand) of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over three months.