9.	DEFERRED COMPENSATION

The Company has deferred compensation agreements with a former and current officer. The related expense is calculated using the net present value of the expected payments and is included in selling, general and administrative expenses in the Consolidated Statements of Operations. The Company's current and non-current deferred compensation obligations are included in accrued liabilities and deferred compensation, respectively, in the Consolidated Balance Sheets. The net present value was calculated for the former officer using a discount factor of

2.60%

as of

June 30,

2019

and

2018

. The net present value was calculated for the current officer using a discount factor of

4.80%

June 30,

2019

and

2018

The Board of Directors entered into an agreement to continue the

1991

base salary of the former chairman for the remainder of his life. These payments began in the fiscal year ended

June 30, 2015,

and payments of

$150,000

were made under this arrangement for the years ended

June 30,

2019

and

2018

. The Company has a deferred compensation liability of

$540,379

and

$672,884

recorded as of

June 30,

2019

and

2018

, respectively. Deferred compensation expense of

$17,495

and

$102,293

was recognized under this arrangement in

2019

and

2018

, respectively.

The Board of Directors has approved a supplemental retirement plan

for

an officer that calls for annual cash compensation following retirement from the Company in an amount equal to

of base salary, as defined in the agreement, multiplied by the number of years of service to the Company. The retirement payments are to be paid monthly to the officer until his death and then to his surviving spouse monthly until her death. The Company has a deferred compensation liability of

$2,029,583

and

$1,871,125

recorded as of

June 30,

2019

and

2018

, respectively. Deferred compensation expense of

$158,458

and

$147,298

was recognized under this arrangement in

2019

and

2018

, respectively.