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Share-Based Compensation
 9 Months Ended
Mar. 31, 2022
Share-based Payment Arrangement [Abstract]  
Share-Based Compensation Share-based Compensation
Farmer Bros. Co. Amended and Restated 2017 Long-Term Incentive Plan (the “2017 Plan”)
As of March 31, 2022, there were 1,616,697 shares available under the 2017 Plan including shares that were forfeited under the prior plans for future issuance.
On December 15, 2021, the Company’s stockholders approved an amendment (the “Plan Amendment”) to the 2017 Plan, which (i) increased the number of shares of Common Stock available for grant under the Plan by 1,500,000 additional shares of Common Stock and (ii) allows the Company to utilize awards to attract and incentivize non-employee consultants.
Farmer Bros. Co. 2020 Inducement Incentive Award Plan (the “2020 Inducement Plan”)
As of March 31, 2022, there were 138,520 shares available under the 2020 Inducement Plan.
Non-qualified stock options with time-based vesting (“NQOs”)
One-third of the total number of shares subject to each stock option vest ratably on each of the first three anniversaries of the grant date, contingent on continued employment, and subject to accelerated vesting in certain circumstances. There were no NQOs granted during the nine months ended March 31, 2022.
The following table summarizes NQO activity for nine months ended March 31, 2022:
Outstanding NQOs:Number
of NQOs		Weighted
Average
Exercise
Price ($)		Weighted
Average
Remaining
Life
(Years)		Aggregate
Intrinsic
Value
($ in thousands)
Outstanding at June 30, 2021513,325 13.065.17$706 
Granted— ——— 
Exercised— ——— 
Forfeited(19,173)16.24—— 
Expired(27,028)20.67—— 
Outstanding at March 31, 2022467,124 12.524.50$35 
Exercisable at March 31, 2022
277,762 13.604.33$12 
The aggregate intrinsic values outstanding at the end of period in the table above represent the total pretax intrinsic values, based on the closing price of Common Stock of $7.12 at March 31, 2022 and $12.69 at June 30, 2021, representing the last trading day of the respective periods, which would have been received by NQO holders had all award holders exercised their NQOs that were in-the-money as of those dates. NQOs outstanding that are expected to vest are net of estimated forfeitures.
There were no options exercised during nine months ended March 31, 2022 and 2020.
At March 31, 2022 and June 30, 2021, respectively, there was $0.4 million and $0.9 million of unrecognized NQO compensation cost. The unrecognized NQO compensation cost at March 31, 2022 is expected to be recognized over the weighted average period of eight months. Total compensation expense for NQOs was $95.3 thousand and $167.7 thousand for the three months ended March 31, 2022 and 2021, respectively and $432.9 thousand and $586.8 thousand for the nine months ended March 31, 2022 and 2021, respectively.
Non-qualified stock options with performance-based and time-based vesting (“PNQs”)
The following table summarizes PNQ activity for the nine months ended March 31, 2022:
Outstanding PNQs:Number
of
PNQs		Weighted
Average
Exercise
Price ($)		Weighted
Average
Remaining
Life
(Years)		Aggregate
Intrinsic
Value
($ in 
thousands)
Outstanding at June 30, 202111,750 29.760.71$— 
Granted— ——— 
Exercised— ——— 
Forfeited— ——— 
Expired(9,538)29.51—— 
Outstanding at March 31, 20222,212 30.911.07$— 
Exercisable at March 31, 2022
2,211 30.911.07$— 
The aggregate intrinsic values outstanding at the end of each fiscal period in the table above represent the total pretax intrinsic values, based on the Company’s closing stock price of $7.12 at March 31, 2022 and $12.69 at June 30, 2021, representing the last trading day of the respective fiscal periods, which would have been received by PNQ holders had all award holders exercised their PNQs that were in-the-money as of those dates.
There were no options exercised during nine months ended March 31, 2022 and 2021.
At March 31, 2022 and June 30, 2021, there was no unrecognized PNQ compensation cost. There was no compensation expense related to PNQs in the three and nine months ended March 31, 2022 and 2021.
Restricted Stock
The following table summarizes restricted stock activity for the nine months ended March 31, 2022:
Outstanding and Nonvested Restricted Stock Awards:
Shares
Awarded		Weighted Average
Grant Date Fair Value ($)
Outstanding and nonvested at June 30, 2021681,570 $10.47 
Granted423,408 7.61 
Vested/Released(260,011)5.02 
Cancelled/Forfeited(105,072)7.00 
Outstanding and nonvested at March 31, 2022739,895 $6.78 
The total grant-date fair value of restricted stock granted during the nine months ended March 31, 2022 was $3.5 million.
At March 31, 2022 and June 30, 2021, there was $4.0 million and $2.8 million, respectively, of unrecognized compensation cost related to restricted stock. The unrecognized compensation cost related to restricted stock at March 31, 2022 is expected to be recognized over the weighted average period of 1.4 years. Total compensation expense for restricted stock was $0.5 million and $0.4 million, respectively, in the three months ended March 31, 2022 and 2021. Total compensation expense for restricted stock was $1.5 million and $1.5 million, respectively, in the nine months ended March 31, 2022 and 2021.
Performance-Based Restricted Stock Units (“PBRSUs”)
The following table summarizes PBRSU activity for the nine months ended March 31, 2022:
Outstanding and Nonvested PBRSUs:
PBRSUs
Awarded(1)		Weighted Average
Grant Date Fair Value ($)
Outstanding and nonvested at June 30, 2021354,466 $6.06 
Granted(1)158,659 8.91 
Vested/Released(381)25.04 
Cancelled/Forfeited(17,671)3.11 
Outstanding and nonvested at March 31, 2022495,073 $5.14 
_____________
(1) The target number of PBRSUs is presented in the table. Under the terms of the awards, the recipient may earn between 0% and 200% of the target number of PBRSUs depending on the extent to which the Company meets or exceeds the achievement of the applicable financial performance goals.
The total grant-date fair value of PBRSUs granted during the nine months ended March 31, 2022 was $1.4 million.
At March 31, 2022 and June 30, 2021, there was $1.9 million and $1.0 million, respectively, of unrecognized PBRSU compensation cost. The unrecognized PBRSU compensation cost at March 31, 2022 is expected to be recognized over the weighted average period of 2.2 years. Total compensation expense for PBRSUs was $173.3 thousand and $192.5 thousand, respectively, for the three months ended March 31, 2022 and 2021. Total compensation expense for PBRSUs was $0.5 million for the nine months ended March 31, 2022. For the nine months ended March 31, 2021, the Company reversed the previously recognized nonvested compensation expense of $295.8 thousand for awards granted prior to fiscal 2021 since it was deemed not probable that the Company will achieve the target performance conditions.
Cash-Settled Restricted Stock Units (“CSRSUs”)
CSRSUs vest in equal installments over a three-year period from the grant date, and are cash-settled upon vesting based on the closing share price of Common Stock on the vesting date.
The CSRSUs are accounted for as liability awards, and compensation expense is measured at fair value on the date of grant and recognized on a straight-line basis over the vesting period net of forfeitures. Compensation expense is remeasured at each reporting date with a cumulative adjustment to compensation cost during the period based on changes in the closing share price of Common Stock.
The following table summarizes CSRSU activity for the nine months ended March 31, 2022:
Outstanding and Nonvested CSRSUs:
CSRSUs
Awarded		Weighted Average
Grant Date Fair Value ($)
Outstanding and nonvested at June 30, 2021185,602 $4.31 
Granted85,851 8.91 
Vested/Released(52,583)4.31 
Cancelled/Forfeited(59,211)5.52 
Outstanding and nonvested at March 31, 2022159,659 $6.34 
The total grant-date fair value of CSRSUs granted during the nine months ended March 31, 2022 was $0.8 million.
At March 31, 2022 and June 30, 2021, there was $1.0 million and $2.0 million, respectively, of unrecognized compensation cost related to CSRSU. The unrecognized compensation cost related to CSRSU at March 31, 2022 is expected to be recognized over the weighted average period of 2.0 years. Total compensation expense for CSRSUs was $25.0 thousand and $142.0 thousand, respectively for the three and nine months ended March 31, 2022. Total compensation expense for CSRSUs was $192.5 thousand and $213.1 thousand in the three and nine months ended March 31, 2021.
Performance Cash Awards (“PCAs”)
In November 2019, the Company granted PCAs under the 2017 Plan to certain employees. The PCAs cliff vest on the third anniversary of the date of grant based on the Company’s achievement of certain financial performance goals for the performance period July 1, 2019 through June 30, 2022, subject to certain continued employment conditions and subject to acceleration provisions of the 2017 Plan. At the end of the three-year performance period, the amount of PCAs that actually vest will be 0% to 200% of the target amount, depending on the extent to which the Company meets or exceeds the achievement of those financial performance goals measured over the full three-year performance period.
The PCAs are measured initially based on a fixed amount of the awards at the date of grant and are required to be re-measured based on the probability of achieving the performance conditions at each reporting date until settlement. Compensation expense for PCAs is recognized over the applicable performance periods. The Company records a liability equal to the cost of PCAs for which achievement of the performance condition is deemed probable. As of March 31, 2022 and 2021, there was no liability and no unrecognized PCA compensation cost since it was deemed not probable that the Company will achieve the target performance conditions.