Stockholders' Equity

9 Months Ended

Sep. 01, 2012

Stockholders' Equity

Stockholders' Equity

10.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,
	September 1, 2012		August 27, 2011			September 1, 2012		August 27, 2011
Income (loss) from continuing operations for computation of basic and diluted per share results, net of tax	$	1,882	$	(568	)	$	345	$	(3,600	)
Income from discontinued operation for computation of basic and diluted per share results, net of tax	—		140			1,647		414
Net income (loss)	$	1,882	$	(428	)	$	1,992	$	(3,186	)
Weighted average shares outstanding for computation of basic per share results	5,139,000		5,134,000			5,137,000		5,129,000
Incremental shares from assumed exercise of Griffin stock options (a)	4,000		—			4,000		—
Adjusted weighted average shares for computation of diluted per share results	5,143,000		5,134,000			5,141,000		5,129,000

(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.  Such assessment is based on income (loss) from continuing operations when net income (loss) includes discontinued operations.  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.

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 September 1, 2012 may be exercised as stock appreciation rights.

The following options were granted by Griffin under the 2009 Stock Option Plan to non-employee directors upon their re-election to Griffin’s Board of Directors and to Griffin’s employees:

	For the 39 Weeks Ended,
	September 1, 2012			August 27, 2011
	Number of Shares	Fair Value per Option at Grant Date		Number of Shares	Fair Value per Option at Grant Date
Non-employee directors	6,748	$	11.32	8,712	$	12.03
Employees	—			104,500	$	10.37 - 12.88
Total	6,748			113,212

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 2012 and 2011 nine month periods were as follows:

	For the 39 Weeks Ended,
	September 1, 2012	August 27, 2011
Expected volatility	41.1%	42.0% to 43.4%
Risk free interest rate	1.16%	2.06% to 2.81%
Expected option term (in years)	8.5	5 to 8.5
Annual dividend yield	—	1.4%

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

	For the 39 Weeks Ended,
	September 1, 2012				August 27, 2011
Vested Options	Number of Shares		Weighted Avg. Exercise Price		Number of Shares		Weighted Avg. Exercise Price
Outstanding at beginning of period	54,075		$	27.08	45,730		$	23.18
Exercised	(5,322	)	$	15.03	(10,667	)	$	17.45
Vested	33,801		$	32.69	19,012		$	31.06
Forfeited	(1,419	)	$	28.18	—		—
Outstanding at end of period	81,135		$	30.19	54,075		$	27.08

Range of Exercise Prices for Vested  Options	Outstanding at September 1, 2012	Weighted Avg.  Exercise Price		Weighted Avg.  Remaining Contractual Life (in years)	Total Intrinsic Value		Total Grant Date Fair Value
$11.00-$12.00	6,776	$	11.81	0.7	$	112	$	35
$24.00-$32.00	29,260	$	28.74	4.0	20		413
$33.00-$39.00	45,099	$	33.89	5.6	—		669
	81,135	$	30.19	4.6	$	132	$	1,117

	For the 39 Weeks Ended,
	September 1, 2012				August 27, 2011
Nonvested Options	Number of Shares		Weighted Avg. Exercise Price		Number of Shares		Weighted Avg. Exercise Price
Nonvested at beginning of period	190,443		$	30.56	103,881		$	32.56
Granted	6,748		$	23.70	113,212		$	28.68
Vested	(33,801	)	$	32.69	(19,012	)	$	31.06
Nonvested at end of period	163,390		$	29.84	198,081		$	30.48

Range of Exercise Prices for Nonvested Options	Outstanding at September 1, 2012	Weighted Avg. Exercise Price		Weighted Avg. Remaining Contractual Life (in years)	Total Intrinsic Value		Total Grant Date Fair Value
$23.00-$30.00	115,056	$	28.41	8.5	$	36	$	1,429
$33.00-$35.00	48,334	$	33.24	6.2	—		668
	163,390	$	29.84	7.8	$	36	$	2,097

Number of option holders at September 1, 2012 17

Compensation expense and related tax benefits for stock options were as follows:

	For the 13 Weeks Ended,				For the 39 Weeks Ended,
	September 1, 2012		August 27, 2011		September 1, 2012		August 27, 2011
Compensation expense	$	124	$	170	$	428	$	447
Related tax benefit	$	32	$	40	$	98	$	111

As of September 1, 2012, the unrecognized compensation expense related to nonvested stock options that will be recognized during future periods is as follows:

Balance of Fiscal 2012	$	123
Fiscal 2013	$	403
Fiscal 2014	$	213
Fiscal 2015	$	90
Fiscal 2016	$	12

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss is comprised of the following:

	September 1, 2012			December 3, 2011
Unrealized gain on investment in Centaur Media	$	321		$	260
Unrealized loss on cash flow hedges	(2,014		)	(1,522		)
Actuarial gain on postretirement benefit plan	284			284
	$	(1,409	)	$	(978	)

Cash Dividend

Griffin did not declare a cash dividend in the 2012 nine month period.  During the 2012 first quarter, Griffin paid $513 for the cash dividend declared in the 2011 fourth quarter.  In the 2011 third quarter, Griffin declared a cash dividend of $0.10 per common share for holders of record as of the close of business on August 25, 2011, which was paid on September 1, 2011.