Note 8 - Employee Benefit Plans

12 Months Ended

Dec. 31, 2012

Pension and Other Postretirement Benefits Disclosure [Text Block]

NOTE 8: EMPLOYEE BENEFIT PLANS

Employee Stock Ownership Plan.  The Company had an employee stock ownership plan (“ESOP”) covering all eligible employees after certain eligibility requirements are met.  On April 23, 2012, the Company received approval from the Internal Revenue Service to terminate the ESOP and the plan was terminated retroactively to be effective as of June 30, 2010.  Participants of the ESOP were notified that they had several options for distributing their shares and cash from the ESOP, including an in-kind distribution to a qualified retirement plan or a lump sum cash distribution to them personally.  The termination of the ESOP caused no recourse to the Company.  There were no contributions to the plan during fiscal 2012, the six month transition period ended December 31, 2011 or the year ended June 30, 2011.

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 $773 for the year ended December 31, 2012, $509 for the six month transition period ended December 31, 2011 and $710 for the year ended June 30, 2011.

Defined Benefit Retirement Plans.  The Company sponsors two partially funded, noncontributory qualified defined benefit pension plans, which covers substantially all union employees and certain 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 was changed to December 31, beginning December 31, 2011.

During the year ended December 2012 our two defined benefit retirement plans were merged together and the beneficiaries of one plan were provided the opportunity to withdraw their pension funds resulting in a lump sum benefit payment of $1,997.  Acceleration of the actuarial net losses (i.e. settlement losses) from accumulated other comprehensive income of $228 was required due to the significance of the lump sum benefit payments during 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 the year ended December 31, 2012, the Company made a change to the plan to terminate these health care and life insurance benefits at retirement age for non-union employees who were not at least 60 years old on September 1, 2012.  The effect of this plan change was a negative plan amendment benefit of $1,165 and $79 curtailment gain.  The negative plan amendment includes $1,021 for health care benefits and $144 for life insurance benefits.  These amounts will be recognized into income over the average remaining years of service to retirement and the average expected lifetime remaining for health care benefits and life insurance benefits, respectively.  The accounting impact for the curtailment results in immediate recognition of a benefit related to unamortized prior service cost of $79. 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 $604, net of $30 of Medicare Part D subsidy receipts, to the plan in fiscal year 2013.

The status of the Company’s plans at December 31, 2012 and 2011 was as follows:

	Defined Benefit Retirement Plans						Post-Retirement Benefit Plan
	December 31,						December 31,
	2012			2011			2012			2011
Change in benefit obligation:
Beginning of period	$	4,884		$	4,024		$	6,309		$	6,498
Service cost		-			-			192			100
Interest cost		146			107			209			151
Actuarial loss (gain)		(300	)		805			768			(134	)
Negative plan amendment benefit		-			-			(1,165	)		-
Benefits paid		(2,040	)		(52	)		(613	)		(306	)
Benefit obligation at end of period	$	2,690		$	4,884		$	5,700		$	6,309

The following table shows the change in plan assets:

	Defined Benefit Retirement Plans						Post-Retirement Benefit Plan
	December 31,						December 31,
	2012			2011			2012		2011
Fair value of plan assets at beginning of period	$	3,278		$	3,440		$	-	$	-
Actual return on plan assets		129			(228	)		-		-
Employer contributions		353			118			-		-
Benefits paid		(2,040	)		(52	)		-		-
Fair value of plan assets at end of period	$	1,720		$	3,278		$	-	$	-

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

	Defined Benefit Retirement Plans									Post-Retirement Benefit Plan
	Year Ended December 31, 2012			Six Months Ended December 31, 2011			Year Ended June 30, 2011			Year Ended December 31, 2012			Six Months Ended December 31, 2011			Year Ended June 30, 2011
Discount rate		3.19	%		4.21	%		5.42	%		2.98	%		3.77	%		4.71	%
Measurement date	December 31, 2012			December 31, 2011			June 30, 2011			December 31, 2012			December 31, 2011			June 30, 2011

Assumptions used to determine net benefit cost for the year ended December 31, 2012, the six month transition period ended December 31, 2011 and the year ended June 30, 2011 were:

	Defined Benefit Retirement Plans									Post-Retirement Benefit Plan
	Year Ended December 31, 2012			Six Months Ended December 31, 2011			Year Ended June 30, 2011			Year Ended December 31, 2012			Six Months Ended December 31, 2011			Year Ended June 30, 2011
Expected return on Assets		7.00	%		7.00	%		7.00	%		-			-			-
Discount rate		4.21	%		5.42	%		5.25	%		3.26	%		4.71	%		5.11	%
Average compensation increase		n/a			n/a			n/a			n/a			n/a			4.50	%

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 benefit cost are as follows:

	Defined Benefit Retirement Plans									Post-Retirement Benefit Plan
	Year Ended December 31, 2012			Six Months Ended December 31, 2011			Year Ended June 30, 2011			Year Ended December 31, 2012			Six Months Ended December 31, 2011			Year Ended June 30, 2011
Service cost	$	-		$	-		$	-		$	192		$	100		$	224
Interest cost		146			107			238			209			151			409
Expected return on assets		(166	)		(118	)		(197	)		-			-			-
Amortization of prior service cost		-			-			-			(227	)		(9	)		(17	)
Prior service cost recognized due to curtailment		-			-			-			(79	)		-			-
Amortization of net actuarial gain		90			11			136			-			-			88
Settlement losses		228			-			-			-			-			-
Total	$	298		$	-		$	177		$	95		$	242		$	704

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

	Defined Benefit Retirement Plans							Post-Retirement Benefit Plan
	Year Ended December 31, 2012		Six Months Ended December 31, 2011			Year Ended June 30, 2011		Year Ended December 31, 2012			Six Months Ended December 31, 2011			Year Ended June 30, 2011
Net actuarial (loss) gain	$	265	$	(1,153	)	$	1,121	$	(768	)	$	134		$	1,634
Settlement losses		228		-			-		-			-			-
Recognized net actuarial gain		90		11			136		-			-			88
Prior service cost recognized due to negative plan adjustment		-		-			-		1,165			-			-
Prior service cost recognized due to curtailments		-		-			-		(79	)		-			-
Amortization of prior service cost		-		-			-		(227	)		(9	)		(17	)
Total other comprehensive income (loss)	$	583	$	(1,142	)	$	1,257	$	91		$	125		$	1,705

Amounts recognized in the Consolidated Balance Sheets are as follows:

	Defined Benefit Retirement Plans						Post-Retirement Benefit Plan
	As of December 31, 2012			As of December 31, 2011			As of December 31, 2012			As of December 31, 2011
Accrued expenses	$	-		$	-		$	(604	)	$	-
Other non-current liabilities		(970	)		(1,607	)		-			-
Accrued retirement benefits		-			-			(5,096	)		(6,309	)
Net amount recognized	$	(970	)	$	(1,607	)	$	(5,700	)	$	(6,309	)

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

	Defined Benefit Retirement Plans						Post-Retirement Benefit Plans
	As of December 31, 2012			As of December 31, 2011			As of December 31, 2012			As of December 31, 2011
Actuarial net (loss) gain	$	(799	)	$	(1,382	)	$	(865	)	$	(97	)
Net prior service cost		-			-			1,036			177
Net amount recognized	$	(799	)	$	(1,382	)	$	171		$	80

The estimated amount that will be recognized from accumulated other comprehensive income (loss) into net periodic benefit cost during the year ended December 31, 2013 is as follows:

	Defined Benefit Retirement Plans			Post-Retirement Benefit Plan
Actuarial net loss	$	(66	)	$	(28	)
Net prior service credits		-			647
Net amount recognized	$	(66	)	$	619

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
Periods ended,	Year Ended December 31, 2012			Year Ended December 31, 2011			Year Ended June 30, 2011
Health care cost trend rate		8.00	%		8.00	%		8.50	%
Ultimate trend rate		5.00	%		5.00	%		5.00	%
Year rate reaches ultimate trend rate		2024			2020			2021

A one percentage point increase (decrease) in the assumed health care cost trend rate would have increased (decreased) the accumulated benefit obligation by $299 ($269) at December 31, 2012, and the service and interest cost would have increased (decreased) by $20 ($34) for the year ended December 31, 2012.

As of December 31, 2012, 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
2013	$	158	$	604	$	30
2014		178		506		29
2015		225		474		28
2016		163		460		27
2017		210		439		25
2018-2022		989		2,237		98
Total	$	1,923	$	4,720	$	237

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

	Defined Benefit Retirement Plan
Asset Category	As of December 31, 2012			As of December 31, 2011			Target Allocation
Cash and cash equivalents		42	%		4	%		0	%
Equity Securities		36	%		67	%		62	%
Debt Securities		13	%		24	%		26	%
Other		9	%		5	%		12	%
Total		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.  At December 31, 2012, the Company held 42% of its investments in cash due to anticipated benefit payments to be made during 2013.  The following table sets forth the Company’s defined benefit retirement plan assets as of December 31, 2012, by level within the fair value hierarchy.

	Fair Value Measurements at December 31, 2012
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	724	$	-	$	-	$	724
Equity Securities:
Domestic equity securities		487		-		-		487
International equity securities		135		-		-		135
Fixed income securities:
Investment grade domestic bonds		207		-		-		207
Other		167		-		-		167
Total	$	1,720	$	-	$	-	$	1,720

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

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 four equity-based compensation plans: the Stock Incentive Plan of 2004 (the “2004 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 year ended December 31, 2012, the six month transition period ended December 31, 2011 and for the year ended June 30, 2011, reflects share-based compensation cost of $969, $510, and $1,164, respectively related to these plans.

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:

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, 2012, no stock options and 906,375 restricted stock awards (net of forfeitures) remained outstanding 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.  

In connection with the Reorganization, the 2004 Plan was amended to provide for grants in the form of restricted stock units.  The awards entitled participants to receive shares of stock following the end of a 5 year vesting period.  Full or pro rata accelerated vesting generally may occur upon a “change in the ownership” of the Company or the subsidiary for which a participant performs services, a “change in effective control” of the Company or a “change in the ownership of a substantial portion of the assets” of the Company (in each case, generally as defined in the Treasury regulations under Section 409A of the Internal Revenue Code), or if employment of a participant is terminated as a result of death, disability, retirement or termination without cause.  Participants have no voting of dividend rights under the awards; however, the awards provide for payment of cash dividend equivalents when dividends are paid to stockholders.  As of December 31, 2012, 392,000 restricted stock unit awards remained outstanding under the 2004 Plan.  As of December 31, 2012, an aggregate of 1,344,312 restricted stock and restricted stock unit awards remain available for future awards under the 2004 Plan.

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, 2012, the directors had outstanding options to purchase 20,000 shares under the Directors’ Option Plan, all of which were exercisable as of December 31, 2012.

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 $13,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. 

In connection with the Reorganization, the Directors’ Stock Plan was amended to provide for grants in the form of restricted stock units instead of restricted shares.  As of December 31, 2012, 103,939 restricted stock awards (vested and non-vested, net of forfeitures) had been granted under the Directors’ Stock Plan.  In contrast to restricted stock awards, shares will not be issued (and participants will not have voting or dividend rights) before awards vest and are issued.  However, the Directors’ Stock Plan provides for the payment of “dividend equivalents” in the terms of such awards.  As of December 31, 2012, 31,264 restricted stock units had been granted under the Directors’ Stock Plan.  As of December 31, 2012, 39,797 restricted stock units remain available for future awards under the Directors’ Stock Plan. 

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, 2012, 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.

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 year ended December 31, 2012, the six month transition period ended December 31, 2011 and for the year ended June 30, 2011, 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, 2012, December 31, 2011, and June 30, 2011 and changes during the periods then ended is presented below:

	Year Ended December 31, 2012				Six Months Ended December 31, 2011					Year Ended June 30, 2011
	Shares		Weighted Average Exercise Price		Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Outstanding at beginning of Period		42,000	$	6.98		63,100		$	6.35		168,350		$	5.91
Granted		-		-		-			-		-			-
Cancelled/Forfeited		22,000		4.88		(1,600	)		5.95		(30,000	)		4.75
Exercised		-		-		(19,500	)		5.02		(75,250	)		6.01
Outstanding at end of Period		20,000	$	9.30		42,000		$	6.98		63,100		$	6.35

During the year ended December 31, 2012, the six month transition period ended December 31, 2011 and the year ended June 30, 2011, the aggregate intrinsic value of stock options outstanding and exercisable was $0, $17, and $146, 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 year ended December 31, 2012, the six month transition period ended December 31, 2011 and for the year ended June 30, 2011 (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 $0, $33, and $187, respectively. Cash received from stock option exercises for the year ended December 31, 2012, the six month transition period ended December 31, 2011 and for the year ended June 30, 2011 aggregated $0, $98, and $452, respectively.

Outstanding options are comprised as follows:

	Shares		Exercise Price		Remaining Contractual Lives (Years)		Shares Exercisable at December 31, 2012
Directors Option Plan		10,000		10.45		2.75		10,000
		8,000		9.09		1.75		8,000
		2,000		4.38		.75		2,000
Total		20,000						20,000

Restricted Stock.  A summary of the status of restricted stock awarded under the Company’s restricted stock plans at December 31, 2012, December 31, 2011, and June 30, 2011 and changes during the periods then ended is presented below:

	Year Ended December 31, 2012					Six Months Ended December 31, 2011					Year Ended June 30, 2011
	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		1,199,661		$	6.26		1,088,644		$	6.23		843,870		$	5.99
Granted		-			-		303,052			5.87		323,629			6.93
Forfeited		(181,696	)		5.97		(112,354	)		6.70		(60,726	)		5.99
Vested		(84,078	)		7.33		(79,681	)		5.41		(18,129	)		8.65
Non vested balance at end of period		933,887		$	6.22		1,199,661		$	6.26		1,088,644		$	6.23

During the year ended December 31, 2012, the six month transition period ended December 31, 2011 and the year ended June 30, 2011, the total fair value of restricted stock awards vested was $616, $431, and $157, respectively.  As of December 31, 2012 there was $2,388 of total unrecognized compensation costs related to stock awards.  These costs are expected to be recognized over a weighted average period of approximately 1.8 years.

Restricted Stock Units.  A summary of the status of restricted stock awarded under the Company’s restricted stock plans at December 31, 2012 is presented below.  The Company had no outstanding restricted stock units prior to the year ending December 31, 2012.

	Year Ended December 31, 2012
	Units			Weighted Average  Grant-Date Fair Value
Non vested balance at beginning of year		-		$	-
Granted		432,264			4.33
Forfeited		(9,000	)		5.92
Vested		-			-
Non vested balance at end of year		423,264		$	4.29

As of December 31, 2012 there was $1,623 of total unrecognized compensation costs related to restricted stock unit awards.  These costs are expected to be recognized over a weighted average period of approximately 3.8 years.

Annual Cash Incentive Plan.  In December 2011, the Human Resources and Compensation Committee (“HRCC”) recommended and the Board of Directors approved the adoption of a new annual cash incentive plan.   This plan was amended and restated in December 2012 and applies to fiscal 2012 and subsequent years (“New Cash Incentive Program”).  For certain senior executives of the Company, the New Cash Incentive Program will function similarly to the prior modified economic profit (“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 in MEP ranges between 50% and 100% of target, an equivalent percentage of targeted bonus that is based on MEP will be paid.   If growth in MEP is over 100% of target, then an equivalent percentage of targeted MEP bonus will be paid, provided that no bonus in excess of 125% will be paid and the HRCC has discretion to limit the payout to 100% where growth in MEP over target ranges from 100% to 125%.  Any MEP improvement in excess of 100% that is not paid will be carried over to the next plan year and be added to the growth in MEP for the following year to determine the amount of incentive compensation payable with respect to that year, unless the HRCC decides to carry over a lesser, or no, amount.

In the final month of each plan year, the HRCC may use projections of MEP and MEP growth performance to determine estimated annual incentive compensation payments to participants where the HRCC wishes to make a 90% payment in such final month (a “December Payment”).  After the financial results for the plan year are available, the annual incentive compensation payment of those participants who received a December Payment will be calculated and a true-up payment for any remainder will be paid.  In the event that a December Payment is in excess of the finally determined amount of actual incentive compensation, the participant is required to pay to the Company the amount of such excess payment within 15 days of the Company’s demand and the Company may elect to set-off any amount it otherwise owes to the participant by the amount of such excess.

For 2012, growth in MEP was measured from calendar year 2011.  For 2012, the HRCC estimated that the MEP improvement was substantially more than 100% of target.  A December Payment equal to 90% of the incentive compensation payable of the MEP improvement at 100% was paid under the plan. 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.

Amounts expensed under the annual cash incentive plan totaled $2,911, $0 and $0 for the year ended December 31, 2012, the six month transition period ended December 31, 2011 and the year ended June 30, 2011, respectively.