Stockholders' Equity

12 Months Ended

Jul. 31, 2012

Stockholders' Equity

14.  STOCKHOLDERS’ EQUITY

In December 2009, the Company purchased 3,980,000 shares of its common stock at $29.00 per share and held them as treasury stock at a total cost of $115,420. The shares were repurchased by the Company from the Estate of Wade F. B. Thompson (the “Estate”) in a private transaction. The Estate holds shares of common stock of the Company previously owned by the late Wade F. B. Thompson, the Company’s co-founder and former Chief Executive Officer. Alan Siegel, a member of the board of directors of the Company (the “Board”), is a co-executor of the Estate. The repurchase transaction was evaluated and approved by members of the Board who are not affiliated with the Estate. At the time of the repurchase, the shares represented 7.2% of the Company’s common stock outstanding. The Company used available cash to purchase the shares.

The Company entered into a repurchase agreement, dated as of August 12, 2011 (the “August 2011 Repurchase Agreement”), to purchase shares of its common stock from the Estate in a private transaction. Pursuant to the terms of the August 2011 Repurchase Agreement, on August 15, 2011, the Company purchased from the Estate 1,000,000 shares of its common stock at a price of $20.00 per share, and held them as treasury stock, representing an aggregate purchase price of $20,000. The closing price of Thor common stock on August 12, 2011 was $20.62. The repurchase transaction was evaluated and approved by members of the Board who are not affiliated with the Estate. The Company used available cash to purchase the shares. The number of shares repurchased by the Company represented 1.8% of the Company’s issued and outstanding common stock prior to the repurchase.

The Company entered into a repurchase agreement, dated as of January 18, 2012 (the “January 2012 Repurchase Agreement”), to purchase shares of its common stock from the Estate in a private transaction. Pursuant to the terms of the January 2012 Repurchase Agreement, on January 20, 2012, the Company purchased from the Estate 1,000,000 shares of its common stock at a price of $28.50 per share, and held them as treasury stock, representing an aggregate purchase price of $28,500. The closing price of Thor common stock on January 18, 2012 was $29.34. The repurchase transaction was evaluated and approved by members of the Board who are not affiliated with the Estate. The Company used available cash to purchase the shares. The number of shares repurchased by the Company represented 1.8% of the Company’s issued and outstanding common stock prior to the repurchase.

The Company also entered into separate repurchase agreements (collectively, the “Catterton Repurchase Agreements”) with each of Catterton Partners VI, L.P., Catterton Partners VI Offshore, L.P., CP6 Interest Holdings, L.L.C., and CPVI Coinvest, L.L.C. (collectively, “Catterton”), each dated as of January 18, 2012, to purchase shares of its common stock from Catterton in a private transaction. Pursuant to the terms of the Catterton Repurchase Agreements, on January 20, 2012, the Company purchased from Catterton an aggregate of 1,000,000 shares of its common stock at a price of $28.50 per share, and held them as treasury stock, representing an aggregate purchase price of $28,500. The closing price of Thor common stock on January 18, 2012 was $29.34. The Company used available cash to purchase the shares. The number of shares repurchased by the Company represented 1.8% of the Company’s issued and outstanding common stock prior to the repurchase.

The Board approved the Thor Industries, Inc. 2010 Equity and Incentive Plan (the “2010 Equity and Incentive Plan”) on October 25, 2010 and the 2006 Equity Incentive Plan (the “2006 Equity Incentive Plan”) on October 16, 2006. These plans were subsequently approved by shareholders at the 2010 and 2006 annual meetings. These plans are designed, among other things, to replace the Company’s 1999 Stock Option Plan (the “1999 Plan”) and the Company’s 1997 Restricted Stock Plan (the “1997 Plan”). Upon approval of the 2006 Equity Incentive Plan, the 1999 Plan and the 1997 Plan were frozen. As a result, there will be no further grants pursuant to either the 1999 Plan or the 1997 Plan. However, outstanding grants under the 1999 Plan remain outstanding, subject to the respective terms and conditions of the Plan. The maximum number of shares issuable under the 2010 Equity Incentive Plan is 2,000,000 and under the 2006 Equity Incentive Plan is 1,100,000. Remaining shares available to be granted under the 2010 Equity Incentive Plan are 1,859,959 and under the 2006 Equity Incentive Plan are 30,000 as of July 31, 2012. Awards may be in the form of options (incentive stock options and non-statutory stock options), restricted stock, restricted stock units, performance compensation awards and stock appreciation rights. Options expire 10 years from the date of grant and are vested evenly over 3 to 5 years from the date of grant.

Stock Options – A summary of option activity under the 1999 Plan, the 2010 Equity and Incentive Plan and the 2006 Equity Incentive Plan is as follows:

	2012				2011				2010
	Shares		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price
Outstanding at beginning of year		1,433,225	$	30.90		1,381,725	$	30.20		513,561	$	23.47
Exercised		(80,500)		17.74		(78,500)		13.33		(586)		26.91
Forfeited		(600,000)		35.18		–		–		–		–
Expired		(20,000)		29.25		–		–		(1,250)		27.40
Granted		–		–		130,000		27.72		870,000		34.17
Outstanding at end of year		732,725	$	28.89		1,433,225	$	30.90		1,381,725	$	30.20
Vested and expected to vest at end of year		712,725	$	28.82		833,225	$	27.82		1,381,725	$	30.20
Exercisable at end of year		566,059	$	29.24		609,891	$	27.84		445,057	$	22.99

The weighted average remaining contractual life for outstanding options and exercisable options at July 31, 2012, was 6.33 and 5.68 years, respectively.

The aggregate intrinsic value of options outstanding and exercisable as of July 31, 2012, 2011 and 2010 is as follows:

	2012		2011		2010
Aggregate intrinsic value of options outstanding and expected to vest	$	966	$	647	$	2,350
Aggregate intrinsic value of options exercisable	$	738	$	647	$	2,263

The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. Assumptions utilized in the model are evaluated when awards are granted. Forfeiture assumptions are revised as necessary to reflect experience. The fair value of the stock options is based upon the market price of the underlying common stock as of the date of the grant, reduced by the present value of estimated future dividends and risk-free interest rates. The risk-free rate for periods within the contractual life of the option is based on the U.S. treasury security rate estimated for the expected life of the options at the date of grant. Expected volatilities are based on the historical volatility of the Company’s stock. The expected term of the options represents the period of time that options granted are expected to be outstanding and is estimated using the Company’s historical exercise and termination behavior.

The weighted average fair value of options granted in fiscal 2011 and fiscal 2010 were $10.80 and $14.69, respectively, as calculated by the Black-Scholes method. There were no option grants during fiscal 2012. The assumptions used in determining the fair value of the options granted during fiscal 2011 and fiscal 2010 are as follows:

Grant Date	July 19, 2011		March 14, 2011		July 20, 2010		April 28, 2010
Expected volatility		46%		46%		45%		45%
Expected life of grant		6 years		6 years		6 years		6 years
Risk-free interest rate		1.8%		2.3%		2.2%		3.1%
Expected dividend rate		1.8%		1.2%		0.9%		0.9%

In fiscal years 2012, 2011 and 2010, the Company recorded expenses of $645, $2,707 and $1,375, respectively, for stock option awards. At July 31, 2012, there was $1,786 of total unrecognized compensation costs related to stock options that is expected to be recognized over a weighted average period of 3.16 years.

Cash received from stock option exercises for the fiscal years ended July 31, 2012, 2011 and 2010 was $1,428, $1,047 and $16, respectively. The total intrinsic value of stock options exercised in fiscal years 2012, 2011 and 2010 was $931, $1,551 and $3, respectively.

The Company recognized a tax benefit related to stock based compensation expense of $224, $1,172 and $481 in fiscal 2012, 2011 and 2010, respectively.

Exercises of options are satisfied with the issuance of new shares from authorized shares.

Stock Awards – There was no restricted stock activity under the 2010 Equity and Incentive Plan in fiscal 2011 or fiscal 2010, and a summary of restricted stock award activity under this Plan for fiscal 2012 is as follows:

	2012
	Shares		Weighted- Average Grant Date Fair Value
Nonvested, Beginning of year		–	$	–
Granted		10,041		29.46
Vested		–		–
Forfeited		–		–
Nonvested, End of year		10,041	$	29.46

In fiscal 2012, 2011 and 2010, the Company recorded expense for restricted stock awards under this plan of $43, $0 and $0, respectively. At July 31, 2012, there was $560 of total unrecognized compensation costs related to restricted stock awards that is expected to be recognized over a weighted average period of 4.88 years. This restricted stock vests evenly over 5 years from the date of grant.

The Company’s 1997 Restricted Stock Plan allowed for the granting of up to 600,000 shares of restricted stock to select executives. The last shares to vest under this plan did so in 2010. In fiscal 2012, 2011, and 2010, the Company recorded expense for restricted stock awards under this plan of $0, $0 and $12, respectively. No further grants have been made under the plan. Restrictions expire 50% after five years following the date of issue and the balance after six years.