Stock-Based Compensation

9 Months Ended

Mar. 31, 2014

Stock-Based Compensation [Abstract]

Stock-Based Compensation

8.Stock-Based Compensation

The Company maintains a 2004 Stock Incentive Plan (“2004 Plan”) and a 1998 Global Team Member Stock Option Plan (“1998 Plan”) covering substantially all company employees and certain other key persons and a Directors Stock Option Plan (“Directors Plan”) covering all non-employee directors.  The Company also had a 1992 Stock Option Plan (“1992 Plan”).  During fiscal year 2014, all remaining options under the 1992 Plan were exercised or expired and no options remain outstanding.  The 2004 Plan replaced the 1992 and Directors Plans as to future grants.  No further grants are permitted to be made under the terms of the 1992, 1998 and Directors Plans.  Options previously granted under the 1998 and Directors Plans will continue to be maintained until all options are exercised, cancelled or expire.  The 2004 and Directors Plans are administered by a committee of the Board of Directors, the Management Development, Compensation and Stock Option Committee.  The 1998 Plan is administered by the President of the Company.

Awards under the 2004 Plan may be in the form of stock options, stock appreciation rights, restricted stock or restricted stock units, performance share awards, director stock purchase rights and deferred stock units; or any combination thereof.  The terms of the awards will be determined by the Management Development, Compensation and Stock Option Committee, except as otherwise specified in the 2004 Plan. 

Stock Options

Options outstanding under the 2004 Plan generally become exercisable at 25% per year beginning one year after the date of grant and expire ten years after the date of grant.  All options outstanding under the 1998 and Directors Plans are vested and expire ten years from the date of grant.  Option prices from options granted under these plans must not be less than fair market value of the Company’s stock on the date of grant.  The Company uses the Black-Scholes model for determining stock option valuations.  The Black-Scholes model requires subjective assumptions, including future stock price volatility and expected time to exercise, which affect the calculated values.  The expected term of option exercises is derived from historical data regarding employee exercises and post-vesting employment termination behavior.  The risk-free rate of return is based on published U.S. Treasury rates in effect for the corresponding expected term.  The expected volatility is based on historical volatility of the Company’s stock price.  These factors could change in the future, which would affect the stock-based compensation expense in future periods. 

The Company recognized non-cash, stock option compensation costs in the amount of $67,000 and $216,000 in the three and nine months ended March 31, 2014, respectively.  The Company recognized non-cash, stock option compensation costs in the amount of $57,000 and $148,000 in the three and nine months ended March 31, 2013, respectively.  As of March 31, 2014, the total remaining unrecognized compensation cost related to non-vested stock options amounted to $800,000.  The Company expects to recognize this cost over a weighted average vesting period of 3.15 years.

The estimated fair value as of the date options were granted during the periods presented, using the Black-Scholes option-pricing model, is shown in the table below.  The Company did not grant any stock options during the three months ended March 31, 2013.

	Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended
	3/31/2014		3/31/2013		3/31/2014		3/31/2013
Weighted average estimated fair value per
share of options granted during the period	$	4.18	$	-	$	3.18	$	2.27
Assumptions:
Dividend yield	$	2.10	$	-	$	2.10	$	-
Common stock price volatility		38.88%		-		38.88%		44.86%
Risk free rate of return		1.46%		-		1.53%		0.62%
Expected option term (in years)		5		-		5		5

The Company received approximately $540,000 and $3,552,000 in cash from option exercises under all share-based payment arrangements for the three and nine months ended March 31, 2014, respectively. The Company received approximately $128,000 and $307,000 in cash from option exercises under all share-based payment arrangements for the three and nine months ended March 31, 2013, respectively.

Restricted Shares

Restricted stock awards under the 2004 Plan are earned based on an individual’s achievement of performance goals during the previous fiscal year with a subsequent one year service vesting after the issuance date.  The grant date fair value associated with the restricted stock is calculated in accordance with ASC 718 “Compensation – Stock Compensation”.  Compensation expense related to restricted stock awards is based on the closing price of the Company’s Common Stock on the grant date authorized by the Company’s Board of Directors, multiplied by the number of restricted stock awards expected to be issued and vested and is amortized over the combined performance and service periods. The stock based compensation expense recorded for restricted stock awards for the three and nine months ended March 31, 2014 was  $66,000 and $123,000, respectively.  As of March 31, 2014, the total remaining unrecognized compensation cost related to restricted stock awards amounted to $336,000.

A summary of the status of restricted shares issued at March 31, 2014 is presented in the table below.

			Weighted Average
	Nonvested		Grant Date
	Shares		Fair Value
Nonvested at June 30, 2013		-	$	-
Granted		22,550		5.39
Vested		-		-
Forfeited or expired		(4,600)		-
Nonvested at March 31, 2014		17,950	$	5.39