STOCK OPTIONS (Notes)

12 Months Ended

Jun. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK OPTIONS

STOCK OPTIONS

In 1990, pursuant to the recommendation of the Board of Directors, the stockholders ratified the creation of the Company’s 1990 Flexible Incentive Plan (the “1990 Plan”).  The 1990 Plan is administered by a committee of the Board of Directors and provides for granting of various stock-based awards including stock options to eligible participants, primarily officers and certain key employees.  A total of 225,000 shares of common stock were available in the first year of the 1990 Plan’s existence.  Each year thereafter additional shares equal to 0.25% of the shares outstanding as of the first day of the applicable fiscal year were reserved for issuance pursuant to the 1990 Plan.  On July 22, 1992, the Board of Directors authorized the reservation of an additional 250,000 shares for the 1990 Plan, which was approved by the stockholders.  In 1993, the Board of Directors authorized the reservation of an additional 300,000 shares for the 1990 Plan, which was approved by the stockholders.  In 1997, the Board of Directors authorized the reservation of an additional 300,000 shares for the 1990 Plan, which was approved by the stockholders.  In 2001, the Board of Directors authorized the reservation of an additional 300,000 shares for the 1990 Plan, which was also approved by the stockholders.  As of June 30, 2012, there are 185,877 options available for future grants.  Options vest over a three to five year period from the date of grant, with a maximum term of five to ten years.

The Board of Directors has approved a new 2012 Omnibus Incentive Plan that will replace the 1990 Plan and is being submitted to the stockholders for approval at the Annual Meeting of Stockholders scheduled for October 3, 2012.

The fair value of each stock option grant was estimated as of the date of grant using the Black-Scholes pricing model.  The resulting compensation cost for fixed awards with graded vesting schedules is amortized on a straight-line basis over the vesting period for the entire award.  The expected term of awards granted is determined based on historical experience with similar awards, giving consideration to the expected term and vesting schedules.  The expected volatility is determined based on the Company’s historical stock prices over the most recent period commensurate with the expected term of the award.  The risk-free interest rate is based on U.S. Treasury zero-coupon issues with a remaining term commensurate with the expected term of the award.  Expected pre-vesting option forfeitures are based on historical data.

As of June 30, 2012, there was approximately $1,128,343 of total unrecognized compensation cost related to stock options granted under the 1990 Plan.  This cost is expected to be recognized over a weighted average period of 2.99 years.  Total unrecognized compensation cost will be adjusted for any future changes in estimated and actual forfeitures.   The Company recognized stock-based compensation expense of $480,623 and $442,998 in 2012 and 2011, respectively.  These expenses were included in selling, general and administrative expenses.

There was no cash received from stock option exercises during 2012 or 2011.

The per share weighted average fair value of the stock options granted during the years ended June 30, 2012 and 2011 were $1.99 and $1.51, respectively.  The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model.  For the options granted in 2012 and 2011, the Company used the following weighted-average assumptions:

	2012		2011
Expected stock price volatility	56	%	49	%
Risk free interest rate	1.31	%	2.40	%
Expected dividend yield	4.00	%	4.58	%
Expected forfeitures	1.50	%	1.50	%
Expected life of options	4.7 years		4.6 years

The following table identifies options granted, exercised, canceled, or available for exercise pursuant to the 1990 Plan:

	Number of Shares		Stock Options Price Range	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life - Years	Aggregate Intrinsic Value of In-The- Money Options
Shares under option at July 1, 2010	1,159,308		$3.90 - $14.40	$	9.12	3.66	$	—
Granted	385,000		$5.24 - $5.76	$	5.59
Exercised	—		—	—
Expired	(210,000	)	$8.38 - $14.40	12.21
Forfeited	—		0	$	—
Shares under option at June 30, 2011	1,334,308		$3.90 - $13.09	$	7.61	4.01	$	349,400
Granted	480,000		$5.05 - $6.60	$	6.24
Exercised	—		—	—
Expired	(140,000	)	$8.40 - $10.71	$	10.38
Forfeited	(160,000	)	$6.91	$	6.91
Shares under option at June 30, 2012	1,514,308		$3.90 - $13.09	$	6.99	4.36	$	88,352
Exercisable as of June 30, 2011	627,308		$3.90 - $13.09	$	9.39
Exercisable as of June 30, 2012	617,308		$3.90 - $13.09	$	8.45

A summary of intrinsic value and cash received from stock option exercises and fair value of vested stock options for the fiscal years ended June 30, 2012 and 2011 is as follows:

	2012		2011
Total intrinsic value of stock options exercised	$	—	$	—
Cash received from stock option exercises	$	—	$	—
Total fair value of stock options vested	$	364,620	$	337,405

During the years ended June 30, 2012 and 2011 total options of 480,000 and 385,000, respectively, were granted during the year at a price equal to or greater than the market value of the common stock on the date of grant. These options had a weighted-average exercise price of $6.24 and $5.59 for the years ended June 30, 2012 and 2011, respectively.