Stockholders' Equity

9 Months Ended

Aug. 27, 2011

Stockholders' Equity

Stockholders' Equity

9. Stockholders’ Equity

Earnings Per Share

Basic and diluted per share results were based on the following:

	For the 13 Weeks Ended,						For the 39 Weeks Ended,
	August 27,  2011			August 28,  2010			August 27,  2011			August 28,  2010
Net loss as reported for computation of basic and diluted per share results	$	(428	)	$	(1,313	)	$	(3,186	)	$	(3,942	)
Weighted average shares outstanding for computation of basic and diluted per share results (a)	5,134,000			5,106,000			5,129,000			5,103,000

(a) Incremental shares from the assumed exercise of Griffin stock options are not included in periods where the inclusion of such shares would be anti-dilutive. The incremental shares from the assumed exercise of stock options in the thirteen and thirty-nine weeks ended August 27, 2011 would have been 6,000 and 8,000, respectively. The incremental shares from the assumed exercise of stock options in the thirteen and thirty-nine weeks ended August 28, 2010 would have been 16,000 and 18,000, respectively.

Griffin Stock Option Plan

Stock options are granted by Griffin under the Griffin Land & Nurseries, Inc. 2009 Stock Option Plan (the “2009 Stock Option Plan”).  Options granted under the 2009 Stock Option Plan may be either incentive stock options or non-qualified stock options issued at fair market value on the date approved by Griffin’s Compensation Committee. Vesting of all of Griffin’s previously issued stock options is solely based upon service requirements and does not contain market or performance conditions.  Stock options issued will expire ten years from the grant date.  In accordance with the 2009 Stock Option Plan, stock options issued to non-employee directors upon their initial election to the board of directors are fully exercisable immediately upon the date of the option grant. Stock options issued to non-employee directors upon their reelection to the board of directors vest on the second anniversary from the date of grant. Stock options issued to employees vest in equal installments on the third, fourth and fifth anniversaries from the date of grant. None of the stock options outstanding at August 27, 2011 may be exercised as stock appreciation rights.

In the 2011 nine month period, 113,212 stock options were granted by Griffin under the 2009 Stock Option Plan, reflecting 104,500 stock options granted to employees and 8,712 stock options granted to non-employee directors upon their re-election to Griffin’s Board of Directors at the 2011 Annual Meeting of Stockholders.  There were 8,202 stock options issued in the 2010 nine month period to non-employee directors upon their reelection to Griffin’s Board of Directors at the 2010 Annual Meeting of Stockholders.  The fair values of the stock options granted in the 2011 nine month period were $12.88 for 87,500 options, $10.37 for 17,000 options and $12.03 for 8,712 stock options.  The fair value of the stock options granted in the 2010 nine month period was $13.48 each.  The fair values of all options granted were estimated as of the grant date using the Black-Scholes option-pricing model.  Assumptions used in determining the fair value of the stock options granted in the 2011 and 2010 nine month periods were as follows:

	For the 39 Weeks Ended,
	August 27, 2011	August 28, 2010
Expected volatility	42.0% to 43.4%	42.3%
Risk free interest rate	2.06% to 2.81%	3.0%
Expected option term	5 to 8.5 years	8.5 years
Annual dividend yield	$0.40	$0.40

Activity under the Griffin Stock Option Plan is summarized as follows:

	For the 39 Weeks Ended,
	August 27, 2011				August 28, 2010
Vested Options	Number of  Shares		Weighted  Avg.  Exercise  Price		Number of  Shares		Weighted  Avg.  Exercise  Price
Outstanding at beginning of period	45,730		$	23.18	71,133		$	17.61
Exercised	(10,667	)	$	17.45	(15,000	)	$	11.34
Vested	19,012		$	31.06	5,698		$	32.84
Outstanding at end of period	54,075		$	27.08	61,831		$	20.53

Range of Exercise  Prices for Vested  Options	Outstanding at  August 27, 2011	Weighted Avg.  Exercise Price		Weighted Avg.  Remaining  Contractual Life  (in years)	Total  Intrinsic  Value		Total  Grant Date  Fair  Value
$11.00-$18.00	12,098	$	13.22	1.1	$	159	$	74
$24.00-$32.00	25,211	$	28.60	8.1	7		358
$34.00-$39.00	16,766	$	34.80	6.4	—		273
	54,075	$	27.08	6.0	$	166	$	705

	For the 39 Weeks Ended,
	August 27, 2011				August 28, 2010
Nonvested Options	Number of  Shares		Weighted  Avg.  Exercise  Price		Number of  Shares		Weighted  Avg.  Exercise  Price
Nonvested at beginning of period	103,881		$	32.56	101,377		$	32.84
Granted	113,212		$	28.68	8,202		$	29.25
Vested	(19,012	)	$	31.06	(5,698	)	$	32.84
Nonvested at end of period	198,081		$	30.48	103,881		$	32.56

Range of Exercise  Prices for  Nonvested Options	Outstanding at  August 27, 2011	Weighted Avg.  Exercise Price		Weighted Avg.  Remaining  Contractual Life  (in years)	Total  Intrinsic  Value		Total  Grant Date  Fair  Value
$27.00-$30.00	121,414	$	28.71	9.4	$	—	$	1,518
$33.00-$35.00	76,667	$	33.28	7.2	—		1,064
	198,081	$	30.48	8.5	$	—	$	2,582

Number of option holders at August 27, 2011 19

Compensation expense for stock options recognized in the 2011 third quarter and 2011 nine month period was $170 and $447, respectively, with related tax benefits of $40 and $111, respectively.  Compensation expense for stock options recognized in the 2010 third quarter and 2010 nine month period was $99 and $285, respectively, with related tax benefits of $26 and $73, respectively.  As of August 27, 2011, the unrecognized compensation expense related to nonvested stock options that will be recognized during future periods is as follows:

Balance of Fiscal 2011	$	160
Fiscal 2012	514
Fiscal 2013	376
Fiscal 2014	199
Fiscal 2015	91
Fiscal 2016	13
	$	1,353

Accumulated Other Comprehensive Income

Changes in accumulated other comprehensive income in the 2011 and 2010 nine month periods consist of the following:

	For the 39 Weeks Ended,
	August 27, 2011			August 28, 2010
Balance at beginning of period	$	1,007		$	926
Decrease in fair value of Centaur Media, net of taxes of ($648) and ($221), respectively	(1,203		)	(410		)
Increase (decrease) in fair value of Centaur Media due to exchange gain (loss), net of taxes of $56 and ($85), respectively	105			(157		)
Decrease in fair value of cash flow hedges, net of taxes of ($325) and ($397), respectively	(553		)	(676		)
Balance at end of period	$	(644	)	$	(317	)

Accumulated other comprehensive income is comprised of the following:

	August 27, 2011			November 27, 2010
Unrealized gain on investment in Centaur Media	$	524		$	1,622
Unrealized loss on cash flow hedges	(1,487		)	(934		)
Actuarial gain on postretirement benefits plan	319			319
	$	(644	)	$	1,007

Cash Dividend

In both the 2011 and 2010 nine month periods, Griffin declared three cash dividends of $0.10 per common share each.