Note 8 - Employee Benefit Plans

6 Months Ended

Dec. 31, 2011

Pension and Other Postretirement Benefits Disclosure [Text Block]

NOTE 8:                      EMPLOYEE BENEFIT PLANS

Employee Stock Ownership Plan.  The Company has an employee stock ownership plan covering all eligible employees after certain eligibility requirements are met.  There were no contributions to the plan for the six month transition period ended December 31, 2011 or the years ended June 30, 2011, June 30, 2010 and June 30, 2009 and the Company intends to terminate the plan.   Prior contributions had been made in the form of cash and/or additional shares of common stock.

401(k) Plans.  The Company has established 401(k) profit sharing plans covering all employees after certain eligibility requirements are met.  Amounts charged to operations related to the plans totaled $509 for the six month transition period ended December 31, 2011 and $710, $1,061 and $389 for the years ended June 30, 2011, 2010 and June 30, 2009, respectively.

Defined Benefit Retirement Plans.  The Company sponsors two partially funded, noncontributory qualified defined benefit pension plans, which covers substantially all union employees at Atchison and former employees at the Pekin facility.  The benefits under these pension plans are based upon years of qualified credited service; however benefit accruals under the Atchison plan were frozen as of October 15, 2009 and benefit accruals under the Pekin plan were frozen as of December 10, 2009.   The Company’s funding policy is to contribute annually not less than the regulatory minimum and not more than the maximum amount deductible for income tax purposes.  Historically, the measurement and valuation date of the plans was June 30; however, in conjunction with the Company’s change in fiscal year end, the measurement date has been changed to December 31, beginning December 31, 2011.  Related to the plans, the Company accrued $0 during the six month transition period ended December 31, 2011 and $23 and $100 during fiscal 2011 and 2010, respectively. The Company expects to contribute $80 to the plans in fiscal year 2012.

Other Post-Retirement Benefit Plan.  The Company sponsors an unfunded, contributory qualified plan that provides life insurance coverage as well as certain health care and medical benefits, including prescription drug coverage, to certain retired employees.  This post-retirement benefit plan is contributory and provides benefits to retirees and their spouses.  Contributions are adjusted annually.  The plan contains fixed deductibles, coinsurance and out-of-pocket limitations.  The life insurance segment of the plan is noncontributory and is available to retirees only. During fiscal 2010, the plan experienced a partial settlement and a curtailment related to the Pekin facility and its subsequent inclusion in a joint venture.

The liability for such benefits is unfunded as it is the Company’s policy to fund benefits payable as they come due.  Consistent with the discussion above, the Company’s measurement date is now December 31.  The Company expects to contribute approximately $623, net of $31 of Medicare Part D subsidy receipts, to the plan in fiscal year 2012.

The status of the Company’s plans at December 31, 2011, June 30, 2011 and June 30, 2010, respectively, was as follows:

	Defined Benefit Retirement Plans									Post-Retirement Benefit Plan
	December 31, 2011			June 30, 2011			June 30, 2010			December 31, 2011			June 30, 2011			June 30, 2010
Change in benefit obligation:
Beginning of period	$	4,024		$	4,587		$	3,689		$	6,498		$	8,170		$	8,799
Service cost		-			-			138			100			224			197
Interest cost		107			238			231			151			408			482
Actuarial loss (gain)		805			(667	)		556			(134	)		(1,634	)		715
Curtailment gain		-			-			-			-			-			(501	)
Settlement gain		-			-			-			-			-			(873	)
Benefits paid		(52	)		(134	)		(27	)		(306	)		(670	)		(649	)
Benefit obligation at end of period	$	4,884		$	4,024		$	4,587		$	6,309		$	6,498		$	8,170

The following table shows the change in plan assets:

	Defined Benefit Retirement Plans									Post-Retirement Benefit Plan
	December 31, 2011			June 30, 2011			June 30, 2010			December 31, 2011		June 30, 2011		June 30, 2010
Fair value of plan assets at beginning of period	$	3,440		$	2,823		$	2,228		$	-	$	-	$	-
Actual return on plan assets		(228	)		651			216			-		-		-
Employer contributions		118			100			405			-		-		-
Benefits paid		(52	)		(134	)		(27	)		-		-		-
Fair value of plan assets at end of period	$	3,278		$	3,440		$	2,822		$	-	$	-	$	-

Assumptions used to determine accumulated benefit obligations as of the year-end were:

	Defined Benefit Retirement Plans									Post-Retirement Benefit Plan
	Six Months Ended			Year Ended June 30,						Six Months Ended			Year Ended June 30,
	December 31, 2011			2011			2010			December 31, 2011			2011			2010
Discount rate		4.21	%		5.42	%		5.25	%		3.77	%		4.71	%		5.11	%
Average compensation increase		n/a			n/a			n/a			n/a			n/a			4.50	%
Measurement date	December 31, 2011			June 30, 2011			June 30, 2010			December 31, 2011			June 30, 2011			June 30, 2010

 Assumptions used to determine net benefit cost for the six month transition period ended December 31, 2011 and the years ended June 30, 2011, 2010 and 2009 were:

	Defined Benefit Retirement Plans												Post-Retirement Benefit Plan
	Six Months Ended			Year Ended June 30,									Six Months Ended			Year Ended June 30,
	December 31, 2011			2011			2010			2009			December 31, 2011			2011			2010			2009
Expected return on assets		7.00	%		7.00	%		7.00	%		7.00	%		-			-			-			-
Discount rate		5.42	%		5.25	%		6.29	%		6.41	%		4.71	%		5.11	%		6.23	%		6.41	%
Average compensation increase		n/a			n/a			n/a			n/a			n/a			4.50	%		4.50	%		4.50	%
Measurement date	December 31, 2011			June 30, 2011			June 30, 2010			June 30, 2009			December 31, 2011			June 30, 2011			June 30, 2010			June 30, 2009

The discount rate refers to the interest rate used to discount the estimated future benefit payments to their present value, referred to as the benefit obligation. The discount rate allows the Company to estimate what it would cost to settle the pension obligations as of the measurement date.   The Company determines the discount rate using a yield curve of high-quality fixed-income investments whose cash flows match the timing and amount of the Company’s expected benefit payments.

In determining the expected rate of return on assets, the Company considers its historical experience in the plans’ investment portfolio, historical market data and long-term historical relationships as well as a review of other objective indices including current market factors such as inflation and interest rates.

Components of net periodic benefit cost are as follows:

	Defined Benefit Retirement Plans												Post-Retirement Benefit Plan
	Six Months Ended December 31, 2011			Year Ended June 30,									Six Months Ended December 31, 2011			Year Ended June 30,
				2011			2010			2009						2011			2010			2009
Service cost	$	-		$	-		$	138		$	564		$	100		$	224		$	197		$	301
Interest cost		107			238			231			194			151			409			482			498
Expected return on assets		(118	)		(197	)		(169	)		(175	)		-			-			-			-
Amortization of unrecorded prior service cost		-			-			13			25			(9	)		(17	)		(24	)		(37	)
Curtailment loss		-			-			120			-			-			-			-			-
Other amortization		11			136			86			16			-			88			32			20
Total	$	-		$	177		$	419		$	624		$	242		$	704		$	687		$	782

Changes in plan assets and benefit obligations recognized in other comprehensive income (loss) are as follows:

	Defined Benefit Retirement Plans											Post-Retirement Benefit Plan
	Six Months Ended December 31, 2011			Year Ended June 30,								Six Months Ended December 31, 2011			Year Ended June 30,
				2011		2010			2009						2011			2010			2009
Net actuarial (loss) gain	$	(1,220	)	$	1,121	$	(509	)	$	(819	)	$	134		$	1,634		$	(715	)	$	(855	)
Recognized net actuarial gain		78			136		85			16			-			88			32			20
Prior service cost recognized due to curtailment		-			-		-			-			-			-			(124	)		-
Reduction in unrecognized loss due to curtailments and settlements		-			-		-			-			-			-			621			-
Amortization of prior service cost		-			-		133			25			(9	)		(17	)		(24	)		(37	)
Total accumulated other comprehensive income (loss)	$	(1,142	)	$	1,257	$	(291	)	$	(778	)	$	125		$	1,705		$	(210	)	$	(872	)

Amounts recognized in the Consolidated Balance Sheets are as follows:

	Defined Benefit Retirement Plans									Post-Retirement Benefit Plan
	As of December 31, 2011			As of June 30, 2011			As of June 30, 2010			As of December 31, 2011			As of June 30, 2011			As of June 30, 2010
Accrued expenses	$	-		$	(24	)	$	(100	)	$	-		$	-		$	-
Other non-current liabilities		(1,607	)		(560	)		(1,665	)		-			-			-
Accrued retirement benefits		-			-			-			(6,309	)		(6,498	)		(8,170	)
Net amount recognized	$	(1,607	)	$	(584	)	$	(1,765	)	$	(6,309	)	$	(6,498	)	$	(8,170	)

The following amounts have been recognized in accumulated other comprehensive income:

	Defined Benefit Retirement Plans												Post-Retirement Benefit Plan
	As of December 30, 2011			As of June 30, 2011			As of June 30, 2010			As of June 30, 2009			As of December 31, 2011			As of June 30, 2011			As of June 30, 2010			As of June 30, 2009
Actuarial net (loss) gain	$	(1,382	)	$	(240	)	$	(1,497	)	$	(1,073	)	$	(97	)	$	(231	)	$	(1,954	)	$	(1,891	)
Net prior service cost		-			-			-			(133	)		177			186			203			350
Net amount recognized	$	(1,382	)	$	(240	)	$	(1,497	)	$	(1,206	)	$	80		$	(45	)	$	(1,751	)	$	(1,541	)

The estimated amount that will be recognized from accumulated other comprehensive income (loss) into net periodic benefit cost during the year ended December 31, 2012 is as follows:

	Defined Benefit Retirement Plans			Post-Retirement Benefit Plan
Actuarial net (loss) gain	$	(112	)	$	-
Net prior service cost		-			17
Net amount recognized	$	(112	)	$	17

The assumed average annual rate of increase in the per capita cost of covered benefits (health care cost trend rate) is as follows:

	Post-Retirement Benefit Plan
	Six Months Ended			Year Ended June 30,
Periods ended,	December 31, 2011			2011			2010			2009
Health care cost trend rate		8.00	%		8.50	%		8.50	%		8.50	%
Ultimate trend rate		5.00	%		5.00	%		5.50	%		6.00	%
Year rate reaches ultimate trend rate		2020			2021			2017			2020

A one percentage point increase (decrease) in the assumed health care cost trend rate would have increased (decreased) the accumulated benefit obligation by $384 ($342) at December 31, 2011, and the service and interest cost would have increased (decreased) by $20 ($18) for the six month transition period ended December 31, 2011.

As of December 31, 2011, the following expected benefit payments (net of Medicare Part D subsidiary for Post-Retirement Benefit Plan Payments), and the related expected subsidy receipts which reflect expected future service, as appropriate, are expected to be paid to plan participants:

	Defined Benefit Retirement Plan		Post-Retirement Benefit Plan
	Expected Benefit  Payments		Expected Benefit Payments		Expected Subsidy Receipts
2012	$	141	$	623	$	31
2013		170		563		31
2014		197		424		30
2015		249		401		29
2016		201		425		27
2017-2021		1,455		2,931		108
Total	$	2,413	$	5,367	$	256

The weighted average asset allocation by asset category is as follows:

	Defined Benefit Retirement Plan
Asset Category	As of December 31, 2011			As of June 30, 2011			As of June 30, 2010			Target Allocation
Equity Securities		67	%		71	%		68	%		62	%
Debt Securities		24	%		23	%		29	%		26	%
Other		9	%		6	%		3	%		12	%
Total		100	%		100	%		100	%		100	%

The Company’s investment strategy is based on an expectation that equity securities will outperform debt securities over the long term.  Accordingly, the composition of the Company’s plan assets is broadly characterized as a 62%/26%/12% allocation between equity, debt, and other securities.  The strategy utilizes a diversified equity approach using multiple asset classes.  The fixed income portion is actively managed investment grade debt securities (which constitute 80% or more of debt securities) with a lesser allocation to high-yield, international, inflation-protected, and rising rate debt securities.  Of the lesser allocation, any one debt category will be no greater than 10% of the total debt portfolio.  The portfolio may also utilize alternative assets to mitigate risk in the portfolio.

The Company further mitigates investment risk by rebalancing between equity and debt classes to maintain allocation parameters to be within approximately +/- 10% of established targets.  This is done to handle changes in asset allocation caused by Company contributions, monthly benefit payments, and general market volatility.  The following table sets forth the Company’s defined benefit retirement plan assets as of December 31, 2011, by level within the fair value hierarchy.

	Fair Value Measurements at December 31, 2011
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	159	$	-	$	-	$	159
Equity Securities:
Domestic equity securities		1,624		-		-		1,624
International equity securities		560		-		-		560
Fixed income securities:
Investment grade domestic bonds		626		-		-		626
International bonds		165		-		-		165
Other		144		-		-		144
Total	$	3,278	$	-	$	-	$	3,278

The following table sets forth the Company’s defined benefit retirement plan assets as of June 30, 2011, by level within the fair value hierarchy.

	Fair Value Measurements at June 30, 2011
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	17	$	-	$	-	$	17
Equity Securities:
Domestic equity securities		1,899		-		-		1,899
International equity securities		656		-		-		656
Fixed income securities:
Investment grade domestic bonds		621		-		-		621
International bonds		170		-		-		170
Other		77		-		-		77
Total	$	3,440	$	-	$	-	$	3,440

The following table sets forth the Company’s defined benefit retirement plan assets as of June 30, 2010, by level within the fair value hierarchy.

	Fair Value Measurements at June 30, 2010
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	28	$	-	$	-	$	28
Equity Securities:
Domestic equity securities		1,432		-		-		1,432
International equity securities		497		-		-		497
Fixed income securities:						-
Investment grade domestic bonds		649		-		-		649
International bonds		156		-		-		156
Other		60		-		-		60
Total	$	2,822	$	-	$	-	$	2,822

Level 1 assets are valued based on quoted prices in active markets for identical securities. The majority of Level 1 assets listed above include exchange traded index funds, bond funds and mutual funds.

Equity-Based Compensation Plans.  The Company has five equity-based compensation plans, the Stock Incentive Plan of 2004 (the “2004 Plan”), the Stock Incentive Plan of 1996 (the “1996 Plan”), the Stock Option Plan for Outside Directors (the “Directors’ Option Plan”), the 1998 Stock Incentive Plan for Salaried Employees (the “Salaried Plan”) and the Non-Employee Directors' Restricted Stock Plan (the "Directors' Stock Plan"). The Company’s equity based compensation plans provide for the awarding of stock options, stock appreciation rights and shares of restricted common stock (“restricted stock”) for senior executives and salaried employees as well as outside directors.  Compensation expense related to restricted stock awards is based on the market price of the stock on the date the Board of Directors communicates the approved award and is amortized over the vesting period of the restricted stock award.

The consolidated statement of operations for the six month transition period ended December 31, 2011 and for the years ended December 31, 2011, 2010, and 2009 reflects share-based compensation cost of $510, $1,164, $491 and $14, respectively related to these plans.

As further described in Note 22. Subsequent Events, in conjunction with reorganization of the Company into a holding company structure on January 3, 2012, the new holding company adopted all of the active shareholder-approved stock plans, which are described as follows:

1996 Plan

Under the 1996 Plan, the Company was authorized to grant incentives for up to 1,200,000 shares of the Company’s common stock to key employees.  The term of each award was determined by the committee of the Board of Directors charged with administering the 1996 Plan.  Under the terms of the 1996 Plan, options granted could be either nonqualified or incentive stock options and the exercise price could not be less than the fair value of the Company’s common stock on the date of the grant.  On January 31, 2006, the period in which the Company could grant incentives expired and no further options may be granted.  At December 31, 2011, the Company had outstanding incentive stock options to purchase 20,000 shares under the 1996 plan, all of which were exercisable.  The options originally had ten-year terms and have exercise prices equal to fair market value on the date of grant.

2004 Plan

Under the 2004 Plan, as amended, the Company may grant incentives (including stock options and restricted stock awards) for up to 2,680,000 shares of the Company’s common stock to salaried, full time employees, including executive officers.  The term of each award generally is determined by the committee of the Board of Directors charged with administering the 2004 Plan.  Under the terms of the 2004 Plan, any options granted will be nonqualified stock options, must be exercisable within ten years and must have an exercise price which is not less than the fair value of the Company’s common stock on the date of the grant.  As of December 31, 2011, no stock options and 1,146,689 restricted stock awards (net of forfeitures) remained outstanding under the 2004 Plan.  As of December 31, 2011, 1,400,444 restricted stock awards remain available for future awards under the 2004 Plan.

Under programs approved by the Company’s Board of Directors annually in fiscal years 2004 through 2007, shares of restricted stock were awarded to senior executives and other employees under plans in which they were eligible.  These annual programs provided for the accelerated vesting of restricted stock after three fiscal years if the Company achieved certain specific operating and financial objectives over such period. If the objectives were not met, the program provided for the vesting of the restricted stock at the end of the seventh fiscal year of the restricted stock award.  Except in the case of awards granted in fiscal 2004, the Company did not achieve the specific operating and financial objectives and accordingly, the awards vest at the end of the seventh year.  Accelerated full or pro rata vesting may occur upon a change of control or if employment is terminated as a result of death, disability, retirement or termination without cause.

Under the annual restricted stock program which has been administered under the Company’s 2004 Stock Incentive Plan since fiscal 2008, amounts awarded are conditioned in part on improvements to MEP (as defined below under Annual Cash Incentive Plan). Under the program, subject to the availability of shares under the 2004 Stock Incentive Plan, restricted stock awards are made each year and generally are based on a percentage (approximately 85.7 percent) of the increase in MEP over the prior year. However, subject to the discretion of the Human Resources and Compensation Committee, the maximum grant date market value of the awards made for any year to all participants is $4,500 and the minimum grant date market value made in any year to all participants, including years in which the change in MEP is negative, is $1,500.  Shares awarded vest in 5 years and are eligible for dividends during the vesting period. Provisions for forfeiture and accelerated full and pro rata vesting generally are similar to those under the guidelines for the Company’s outstanding performance accelerated restricted stock awards.

Directors’ Option Plan

Under the Directors Option Plan, each non-employee or “outside” director of the Company received on the day after each annual meeting of stockholders an option to purchase 2,000 shares of the Company’s common stock at a price equal to the fair market value of the Company’s common stock on such date.  Options became exercisable on the 184th day following the date of grant and expired no later than ten years after the date of grant.  Subject to certain adjustments, a total of 180,000 shares were reserved for annual grants under the Plan. The Plan expired in 2006 and no further options may be granted under it. At December 31, 2011, the Company had outstanding options to purchase 22,000 shares under the Directors’ Option Plan, all of which were exercisable as of December 31, 2011.

Salaried Plan

Under the Salaried Plan, the Company was authorized to grant stock incentives for up to 600,000 shares of the Company’s common stock to full-time salaried employees.  The Salaried Plan provides that the amount, recipients, timing and terms of each award be determined by the Committee of the Board of Directors charged with administering the Salaried Plan.  Under the terms of the Salaried Plan, options granted could be either nonqualified or incentive stock options and the exercise price could not be less than the fair value of the Company’s common stock on the date of the grant.  At December 31, 2011, the Company had no remaining outstanding incentive stock options under the Salaried Plan.  These options originally had ten-year terms and have exercise prices equal to fair market value of the Company’s common stock as of the date of grant.  On March 5, 2008 the period in which the Company could make awards under the Plan expired and no further awards may be made under the Plan.

Directors’ Stock Plan

In addition to annual awards, under the Directors’ Stock Plan, which was approved by stockholders at the 2006 Annual Meeting, as amended, the Company may grant incentives for up to 175,000 shares of the Company’s common stock to outside directors.  The plan allows for grants to be made on the first business day following the date of each annual meeting of stockholders, whereby each non-employee director is awarded shares of restricted stock with a fair market value of $12,500,as determined on such first business day following the annual meeting.  The shares awarded become fully vested upon the occurrence of one of the following events  (1) the third anniversary of the award date, (2) the death of the director, or (3) a change in control, as defined in the Plan.  The Human Resources and Compensation Committee may allow accelerated vesting in the event of specified terminations.  As of December 31, 2011, 52,972 restricted stock awards (net of forfeitures) remained outstanding under the Directors’ Stock Plan.  As of December 31, 2011, 71,061 restricted stock awards remain available for future awards under the Directors’ Stock Plan.  See Note 22. Subsequent Events for further information on the Directors' Stock Plan.

Stock Options.  The fair value of each option is estimated on the date of the grant using the Black-Scholes option-pricing model.  For the six month transition period ended December 31, 2011 and for the years ended June 30, 2011, 2010 and 2009, no options have been granted.

A summary of the status of stock options awarded under the Company’s stock option plans as of December 31, 2011, June 30, 2011, 2010 and 2009 and changes during the periods then ended is presented below:

	Six Months Ended					Year Ended June 30,
	December 31, 2011					2011					2010					2009
	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Outstanding at beginning of Period		63,100		$	6.35		168,350		$	5.91		276,600		$	5.28		421,795		$	5.30
Granted		-			-		-			-		-			-		-			-
Cancelled/Forfeited		(1,600	)		5.95		(30,000	)		4.75		(53,000	)		4.02		(145,195	)		5.32
Exercised		(19,500	)		5.02		(75,250	)		6.01		(55,250	)		4.57		-			-
Outstanding at end of Period		42,000		$	6.98		63,100		$	6.35		168,350		$	5.91		276,600		$	5.28

During the six month transition period ended December 31, 2011 and the years ended June 30, 2011, 2010 and 2009, the aggregate intrinsic value of stock options outstanding and exercisable was $17, $146, $265 and $0, respectively. The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company’s average closing stock price on the last ten trading days of the related fiscal period and the exercise price, multiplied by the number of related in-the-money options) that would have been received by the option holders had they exercised their options at the end of the period.  This amount changes based on the market value of the Company’s common stock.  Total intrinsic value of options exercised for the six month transition period ended December 31, 2011 and for the years ended June 30, 2011, 2010 and 2009 (based on the difference between the Company’s stock price on the exercise date and the respective exercise price, multiplied by the number of options determined to be in the money) was $33, $187, $156 and $0, respectively. Cash received from stock option exercises for the six month transition period ended December 31, 2011 and for the years ended June 30, 2011, 2010 and 2009 aggregated $98, $452, $221 and $0, respectively.

Outstanding options are comprised as follows:

	Shares		Exercise Price		Remaining Contractual Lives (Years)		Shares Exercisable at December 31, 2011
The 1996 Plan		10,000	$	3.63		1.00		10,000
		10,000		6.45		.50		10,000
Directors Option Plan		10,000		10.45		3.75		10,000
		8,000		9.09		2.75		8,000
		2,000		4.38		1.75		2,000
		2,000		3.25		.75		2,000
Total		42,000						42,000

Restricted Common Stock.  A summary of the status of restricted stock awarded under the Company’s restricted stock plans at December 31, 2011, June 30, 2011, 2010 and June 30, 2009 and changes during the periods then ended is presented below:

	Six Months Ended					Year Ended June 30,
	December 31, 2011					2011					2010					2009
	Shares			Weighted Average Grant-Date Fair Value		Shares			Weighted Average Grant-Date Fair Value		Shares			Weighted Average Grant-Date Fair Value		Shares			Weighted Average Grant-Date Fair Value
Non vested balance at beginning of period		1,088,644		$	6.23		843,870		$	5.99		932,901		$	6.45		235,855		$	13.62
Granted		303,052			5.87		323,629			6.93		53,893			4.32		869,941			4.62
Forfeited		(112,354	)		6.70		(60,726	)		5.99		(116,417	)		8.64		(115,736	)		8.57
Vested		(79,681	)		5.41		(18,129	)		8.65		(31,507	)		6.70		(57,159	)		3.76
Non vested balance at end of period		1,199,661		$	6.26		1,088,644		$	6.23		843,870		$	5.99		932,901		$	6.45

During the six month transition period ended December 31, 2011 and the years ended June 30, 2011, 2010 and 2009, the total fair value of restricted stock awards vested was $431, $157, $185 and $215, respectively.  As of December 31, 2011 there was $4,151 of total unrecognized compensation costs related to stock awards.  These costs are expected to be recognized over a weighted average period of approximately 3.5 years.

Annual Cash Incentive Plan.  For fiscal years 2009 through 2011, the Company had annual cash incentive plans based upon varying applications of modified economic profit (“MEP”).  The program for fiscal 2011 and 2010 (“Current MEP Program”) varied from that used in fiscal 2009.  Under the Current MEP Program, annual target awards are a percentage of base pay set by the Human Resources and Compensation Committee (“HRCC”).  The actual amount of awards that may be paid depend on the percentage of base pay set by the Committee as a target award and the extent to which the improvement in MEP over the base period meets or exceeds targeted growth in MEP as approved by the HRCC.  The HRCC has discretion under the annual incentive plan to adjust factors used in determining incentive compensation and to include or exclude unusual items.  No incentive compensation is payable if growth is less than 80% of target. Not more than 125% of the targeted bonus award may be paid to a participant, which amount is payable if MEP growth exceeds 110% of target.

For the six month transition period ended December 31, 2011, the target for growth in MEP was 50% of the increase amount that was targeted for fiscal 2011.  The Company did not exceed its targeted growth in MEP of $1,500 for the six month transition period ended December 31, 2011, and no incentive was paid for the six month transition period ended December 31, 2011.  For the year ended June 30, 2011, the growth in MEP was measured against fiscal 2010.  The Company did not exceed its targeted growth in MEP of $3,000 in fiscal 2011, and no annual incentive was paid for fiscal 2011.  For the year ended June 30, 2010, growth in MEP was measured against the fourth quarter of fiscal 2009, annualized, and adjusted to eliminate assets then held for sale.  After giving effect to adjustments approved by the Committee for unusual items, the Company surpassed its targeted growth in MEP of $2,250 over the base period and accrued aggregate annual bonuses of $3,018 for fiscal 2010 under the plan.  No amount was accrued under the program in fiscal 2009 since the targets were not achieved. 

In December 2011, the HRCC recommended and the Board of Directors approved the adoption of a new annual cash incentive plan that will apply to the fiscal 2012 and subsequent years (“New Cash Incentive Program”).  For named executives of the Company, the New Cash Incentive Program will function similarly to the Current MEP Program.  For other eligible participants, 50 percent of the target award is based on improvement in MEP and the remaining 50 percent is based on attainment of individual performance goals.  No incentive compensation is payable if growth is less than 50% of target. If growth is between 50 percent and 125 percent of target, an equivalent percentage of targeted bonus that is based on MEP will be paid.  No amount will be paid for growth more than 125% of the targeted bonus; however any such excess will be carried over the next plan year and will be added to the growth in MEP for the following year to determine the amount of incentive compensation payable with respect to that year.