Note 9 - Share-Based Compensation

12 Months Ended

Jun. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 9 - Share-Based Compensation

Omnibus Plan

The Tandy Brands Accessories, Inc. 2012 Omnibus Plan (“Omnibus Plan”), approved by our stockholders in 2012, is designed to attract and retain the services of key management employees and members of our board of directors through the granting of incentive stock options (other than to directors), nonqualified stock options, performance units, stock appreciation rights, or restricted stock.  Restricted stock and stock option awards under the Omnibus Plan and prior stock option plans have a maximum contractual life of ten years and specific vesting terms and performance goals are addressed in each equity award grant.  All shares which were available for grant under our prior plans have been transferred to the Omnibus Plan and are authorized and reserved for issuance under the Omnibus Plan.  All shares of common stock presently authorized and reserved for issuance on the exercise of stock options or vesting of restricted stock will automatically be authorized and reserved for issuance under the Omnibus Plan on their cancellation, forfeiture, or expiration up to a maximum of 736,326 shares.  At June 30, 2013, there were 694,706 shares of common stock available for future grants.

A committee of non-employee members of our board of directors may grant awards to directors and employees.  Shares issued to satisfy awards may be from authorized but unissued common stock, treasury stock, or shares purchased on the open market.  Currently, we issue new shares under the Omnibus Plan.

Awards Granted

Restricted StockRestricted stock awards are not transferable, but bear rights of ownership including voting and dividend rights.  Awards to our non-employee directors vest annually at a rate of one-third per year, beginning one year after the grant date.  However, upon the death, disability, resignation, or termination of a non-employee director, that director’s shares generally become fully vested.  Consequently, there is no requisite service period and the fair value of the awards is expensed on the award date.  Restricted stock awarded to employees either cliff vests on the third anniversary of the award or vests at a rate of one-third per year.  The requisite service periods are either the vesting period or the total period over which multiple-tranche awards vest.  Although there are no performance requirements related to the vesting of restricted stock awarded to employees, participants must be continually employed through the vesting period.  We estimate the fair value of restricted stock awards to be the market price of our common stock on the award date.  As of June 30, 2013, no restricted stock awards granted to employees were outstanding.

	Number Of Shares			Weighted-Average Grant-Date Fair Value
Nonvested June 30, 2012		35,218		$	2.25
Granted		32,000			1.43
Vested		(15,588	)		2.45
Nonvested June 30, 2013		51,630			1.68

Restricted stock fair values on the vesting dates in fiscal 2013 and 2012 were $20,000 and $78,000, respectively.

Stock OptionsStock options granted to our non-employee directors are nonqualified and become fully vested six months after the grant date, the requisite service period.  Nonqualified options granted to employees vest annually at a rate of one-third per year, beginning one year after the grant date, and have a three-year requisite service period.

The exercise prices of our stock options are the grant-date market values of our common stock.  Their fair value is estimated using the Black-Scholes valuation model.  That model is used to estimate the fair value of traded options that have no vesting restrictions and are fully transferable.  Option valuation models require the input of highly subjective assumptions.  Because our stock options have characteristics significantly different from those of traded options, changes in the subjective input assumptions can materially affect fair value estimates.

				Weighted-Average				Aggregate
	Number Of Shares			Exercise  Price		Remaining Contractual Term (Years)		Intrinsic Value ($000)
Outstanding June 30, 2012		269,316		$	10.22
Granted		35,000			1.40
Forfeited and cancelled		(199,319	)		9.74
Outstanding June 30, 2013		104,997			8.20
Vested and expected to vest		104,997			8.20		4.2	$	-
Exercisable		83,331			9.95		3.0		-

Performance Units  Performance units outstanding as of June 30, 2013 were awarded to certain employees in fiscal 2013.  For the award, the units earned during the applicable performance cycle vary from 0% to 200% of the units awarded based on our basic earnings per share for each year in the performance cycle, excluding the effects of accounting principles changes, extraordinary items, recognized capital gains and losses and, as determined by our board of directors, one-time, non-operating items.  Performance units generally cliff vest at the end of the applicable performance cycle.  Assuming continued employment, if, at the end of the performance cycle, at least the threshold performance level has been achieved, the performance units will cliff vest.  Notwithstanding the foregoing, employees vest in a portion of units earned based on the number of fiscal years employed during the cycle upon death, disability, or normal (age 65) or early (age 55 and 15 years service) retirement and, upon a change of control, employees vest in 100% of the units awarded under the fiscal 2013 awards.

Each performance unit has a $1.00 assigned value.  To the extent earned, performance units awarded are comprised 50% of cash and 50% of phantom shares of our common stock and, to the extent earned following the end of the two-year performance period, will generally be settled in cash (if shares are available under our benefit plans, the Board may, in its discretion, settle the phantom shares attributable to an award in shares of our common stock).

As of June 30, 2013, we expect none of the 950,000 units granted in fiscal 2013 to vest and be paid because performance measures for the two year period were either not met or are not expected to be met.

Expense  Share-based compensation expense of ($110,000) and $169,000 was recognized in fiscal 2013 and 2012, respectively, together with income tax benefits of ($41,000) and $62,000, respectively.  Estimated unrecognized expense of $11,000 remained at June 30, 2013 to be recognized over a weighted-average period of 1.7 years.  The number of stock options and performance units expected to vest in determining compensation expense to be recognized were estimated based on employment termination, forfeiture patterns, and actual and estimated earnings per share.