Note 9 - Equity Compensation

12 Months Ended

Jun. 30, 2014

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

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

NOTE 9 - EQUITY COMPENSATION

Stock Options 

The Company has an equity compensation plan that was approved by shareholders in November 2012 and that covers all of its full-time employees, outside directors and certain advisors.  This 2012 Stock Incentive Plan replaces all previous equity compensation plans. The options granted or stock awards made pursuant to this plan are granted at fair market value at date of grant or award.  Options granted to non-employee directors become exercisable 25% each ninety days (cumulative) from date of grant and options granted to employees generally become exercisable 25% per year (cumulative) beginning one year after the date of grant. The maximum contractual term of the Company’s stock options is ten years.  If a stock option holder’s employment with the Company terminates by reason of death, disability or retirement, as defined in the Plan, the Plan generally provides for acceleration of vesting.  The number of shares reserved for issuance is 686,831 shares, all of which were available for future grant or award as of June 30, 2014.  This plan allows for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted and unrestricted stock awards, performance stock awards, and other stock awards.  As of June 30, 2014, a total of 2,677,464 options for common shares were outstanding from this plan as well as one previous stock option plan (which had also been approved by shareholders), and of these, a total of 1,874,326 options for common shares were vested and exercisable.  As of June 30, 2014, the approximate unvested stock option expense that will be recorded as expense in future periods is $614,781.  The weighted average time over which this expense will be recorded is approximately 30 months.

The fair value of each option on the date of grant was estimated using the Black-Scholes option pricing model. The below listed weighted average assumptions were used for grants in the periods indicated.

	2014			2013			2012
Dividend yield		3.3	%		3.6	%		3.1	%
Expected volatility		53	%		51	%		55	%
Risk-free interest rate		1.7	%		0.6	%		1.0	%
Expected life (in years)		5.5			4.7			4.7

At June 30, 2014, the 436,000 options granted to employees during fiscal 2014 had exercise prices ranging from of $7.20 to $8.44 per share, fair values ranging from $2.64 to $3.64 per share, and remaining contractual lives of between nine years two months and nine years six months.

At June 30, 2013, the 414,750 options granted during fiscal 2013 to both employees and non-employee directors had exercise prices ranging from $6.28 to $6.58 per share, fair values ranging from $2.00 to $2.11 per share, and remaining contractual lives of between nine years two months and nine years five months.

At June 30, 2012, the 36,000 options granted during fiscal 2012 to both employees and non-employee directors had exercise prices ranging from $6.68 to $7.22 per share, fair values ranging from $2.45 to $2.60 per share, and remaining contractual lives of between nine years five months and nine years eight months.

The Company calculates stock option expense using the Black-Scholes model.  Stock option expense is recorded on a straight line basis, or sooner if the grantee is retirement eligible as defined in the 2012 Stock Incentive Plan, with an estimated 2.0% forfeiture rate effective April 1, 2014. Previous estimated forfeiture rates were 2.1% effective January 1, 2014, 2.2% effective July 1, 2013, 2.3% effective January 1, 2013, 3.4% effective October 1, 2012, 4.1% effective April 1, 2012, 3.6% effective April 1, 2011, 3.0% effective July 1, 2010 and 6.55% prior to July 1, 2010.  The expected volatility of the Company’s stock was calculated based upon the historic monthly fluctuation in stock price for a period approximating the expected life of option grants.  The risk-free interest rate is the rate of a five year Treasury security at constant, fixed maturity on the approximate date of the stock option grant.  The expected life of outstanding options is determined to be less than the contractual term for a period equal to the aggregate group of option holders’ estimated weighted average time within which options will be exercised.  It is the Company’s policy that when stock options are exercised, new common shares shall be issued.  The Company recorded $1,004,676, $842,401 and $410,550 of expense related to stock options in fiscal years 2014, 2013 and 2012, respectively.  As of June 30, 2014, the Company had 2,667,192 stock options that were vested and that were expected to vest, with a weighted average exercise price of $9.58 per share, an aggregate intrinsic value of $1,664,121 and weighted average remaining contractual terms of 5.4 years.

Information related to all stock options for the years ended June 30, 2014, 2013 and 2012 is shown in the following tables:

	Twelve Months Ended June 30, 2014
						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Shares			Exercise Price		Contractual Term (in years)		Intrinsic Value
Outstanding at 6/30/13		2,341,150		$	9.95		5.6	$	1,544,896
Granted		436,000		$	7.24
Forfeitures		(39,050	)	$	11.59
Exercised		(60,636	)	$	6.22
Outstanding at 6/30/14		2,677,464		$	9.57		5.4	$	1,674,010
Exercisable at 6/30/14		1,874,326		$	10.74		4.0	$	750,925

	Twelve Months Ended June 30, 2013
						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Shares			Exercise Price		Contractual Term (in years)		Intrinsic Value
Outstanding at 6/30/12		2,006,250		$	10.64		5.8	$	654,747
Granted		414,750		$	6.58
Forfeitures		(44,350	)	$	13.61
Exercised		(35,500	)	$	4.93
Outstanding at 6/30/13		2,341,150		$	9.95		5.6	$	1,544,896
Exercisable at 6/30/13		1,643,050		$	11.34		4.6	$	524,522

	Twelve Months Ended June 30, 2012
						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Shares			Exercise Price		Contractual Term (in years)		Intrinsic Value
Outstanding at 6/30/11		2,123,939		$	10.80		6.3	$	955,401
Granted		36,000		$	7.13
Forfeitures		(150,939	)	$	12.12
Exercised		(2,750	)	$	5.18
Outstanding at 6/30/12		2,006,250		$	10.64		5.8	$	654,747
Exercisable at 6/30/12		1,404,400		$	12.11		5.1	$	234,971

The following table presents information related to unvested stock options:

				Weighted-Average
				Grant Date
	Shares			Fair Value
Non-vested at June 30, 2013		698,100		$	2.20
Granted		436,000		$	2.67
Vested		(329,587	)	$	2.36
Forfeited		(1,375	)	$	2.03
Non-vested at June 30, 2014		803,138		$	2.39

The weighted average grant date fair value of options granted was $2.67, $2.11 and $2.58 per share in fiscal years 2014, 2013 and 2012, respectively. The aggregate intrinsic value of options exercised during the years ended June 30, 2014, 2013 and 2012 were $142,714, $95,223 and $3,365, respectively. The aggregate grant date fair value of options that vested during 2014, 2013 and 2012 was $777,825, $756,543 and $1,122,010, respectively. The Company received $377,401, $175,023 and $14,235 of cash from employees who exercised options in fiscal years 2014, 2013 and 2012, respectively. Additionally, in fiscal 2014 the Company recorded $48,747 as a reduction of federal income taxes payable, $13,009 as an increase in common stock, $27,693 as a reduction of income tax expense, and $8,045 as a reduction of the deferred tax asset related to the exercises of stock options in which the employees sold the common shares prior to the passage of twelve months from the date of exercise.

Stock Compensation Awards

The Company awarded a total of 23,205 common shares in fiscal 2014, a total of 8,092 common shares in fiscal 2013, and a total of 7,076 common shares in fiscal 2012 as stock compensation awards. These common shares were valued at their approximate $192,100, $56,700 and $47,700 fair market values based on their stock price at dates of issuance multiplied by the number of common shares awarded, respectively, pursuant to the compensation programs for non-employee directors who receive a portion of their compensation as an award of Company stock and for employees who receive a nominal stock award following their twentieth employment anniversary. Stock compensation awards are made in the form of newly issued common shares of the Company.

Deferred Compensation Plan

The Company has a non-qualified deferred compensation plan providing for both Company contributions and participant deferrals of compensation. This plan is fully funded in a Rabbi Trust. All plan investments are in common shares of the Company. As of June 30, 2014 there were 31 participants, all with fully vested account balances. A total of 307,328 common shares with a cost of $2,914,700, and 288,505 common shares with a cost of $2,791,000 were held in the plan as of June 30, 2014 and 2013, respectively, and, accordingly, have been recorded as treasury shares. The change in the number of shares held by this plan is the net result of share purchases and sales on the open stock market for compensation deferred into the plan and for distributions to terminated employees. The Company does not issue new common shares for purposes of the non-qualified deferred compensation plan. The Company accounts for assets held in the non-qualified deferred compensation plan in accordance with Accounting Standards Codification Topic 710, Compensation — General. The Company used approximately $183,100 and $175,100 to purchase 24,215 and 25,549 common shares of the Company in the open stock market during fiscal years 2014 and 2013, respectively, for either employee salary deferrals or Company contributions into the non-qualified deferred compensation plan. For fiscal year 2015, the Company estimates the Rabbi Trust for the Nonqualified Deferred Compensation Plan will make net repurchases in the range of 19,000 to 23,000 common shares of the Company. The Company does not currently repurchase its own common shares for any other purpose.