Employee Stock Ownership Plan

The Company’s ESOP was established in 2000. The plan is a leveraged ESOP in which the Company is the lender. The loans will be repaid from the Company’s discretionary plan contributions over the original 15 year term with a variable rate of interest. The annual interest rate was 1.69% at June 30, 2013, which is updated on a quarterly basis.



	As of and for the years ended June 30,
	2013		2012		2011
Loan amount (in thousands)	$	20,836	$	25,637	$	30,437
Shares purchased	—		—		—

Shares are held by the plan trustee for allocation among participants as the loan is repaid. The unencumbered shares are allocated to participants using a compensation-based formula. Subject to vesting requirements, allocated shares are owned by participants and shares are held by the plan trustee until the participant retires.

In fiscal 2011, the Company used $1.3 million of the dividends on ESOP shares to pay down the loans, and allocated to the ESOP participants shares equivalent to the fair market value of the dividends they would have received. No dividends were paid in fiscal 2013 and 2012. In fiscal 2011, the Company issued 1,040 shares of common stock to the ESOP to compensate for a shortfall in unallocated, uncommitted shares.

The Company reports compensation expense equal to the fair market value of shares committed to be released to employees in the period in which they are committed. The cost of shares purchased by the ESOP which have not been committed to be released or allocated to participants are shown as a contra-equity account “Unearned ESOP Shares” and are excluded from earnings per share calculations.

During the fiscal years ended June 30, 2013, 2012 and 2011, the Company charged $2.1 million, $1.5 million, and $2.6 million to compensation expense related to the ESOP. The difference between cost and fair market value of committed to be released shares, which was $0.1 million, $0.1 million and $(1.4) million for the fiscal years ended June 30, 2013, 2012 and 2011, respectively, is recorded as additional paid-in capital.



	June 30,
	2013		2012
Allocated shares	1,885,060		1,763,742
Committed to be released shares	173,244		185,538
Unallocated shares	738,355		911,599
Total ESOP shares	2,796,659		2,860,879


	(In thousands)
Fair value of ESOP shares	$	39,321	$	22,773