9. Stock Based Compensation

The Company maintains a 2004 Stock Incentive Plan (“2004 Plan”) covering substantially all company employees, non-employee directors and certain other key persons. Options previously granted under a 1998 Global Team Member Stock Option Plan (“1998 Plan”) will continue to be maintained until all options are exercised, cancelled or expire. No further grants are permitted to be made under the terms of the 1998 Plan. The 2004 Plan is 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% or 33 1/3 % 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 Plan 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 operating expense for non-cash stock-based compensation costs related to stock options in the amount of $298,000, $255,000 and $166,000 for the fiscal years ended June 30, 2015, 2014 and 2013, respectively. As of June 30, 2015, the total remaining unrecognized compensation cost related to non-vested stock-based compensation amounted to $674,000. The Company expects to recognize this cost over a weighted average vesting period of 2.7 years.

The Company received $853,000 in cash from option exercises under all stock option payment arrangements for the twelve months ended June 30, 2015. The actual tax benefit realized related to tax deductions for non-qualified options exercised and disqualifying dispositions under all stock option payment arrangements totaled approximately $208,000 for fiscal 2015.

Activity under these Plans is shown in the following tables:



	Fiscal Year 2015					Fiscal Year 2014
		Weighted		Aggregate			Weighted		Aggregate
		Average		Intrinsic			Average		Intrinsic
		Exercise		Value (1)			Exercise		Value (1)
Shares subject to option	Shares	Price		($000)		Shares	Price		($000)

Outstanding at beginning of period	765,486	$	8.09			1,122,675	$	7.07
New Grants (based on fair value
of common stock at dates of grant)	114,000	$	10.01			214,000	$	10.80
Exercised	(135,635)	$	6.29			(497,446)	$	7.16
Expired	(21,260)	$	11.48			(18,743)	$	9.14
Forfeited	(63,950)	$	9.70			(55,000)	$	5.89

Outstanding at end of period	658,641	$	8.53	$	1,438	765,486	$	8.09	$	3,614
Exercisable at end of period	356,966	$	7.94	$	1,015	407,236	$	7.47	$	2,148

	Fiscal Year 2013
		Weighted		Aggregate
		Average		Intrinsic
		Exercise		Value (1)
Shares subject to option	Shares	Price		($000)

Outstanding at beginning of period	1,162,996	$	6.81
New Grants (based on fair value
of common stock at dates of grant)	164,000	$	5.76
Exercised	(171,066)	$	3.79
Expired	(30,705)	$	8.79
Forfeited	(2,550)	$	2.93

Outstanding at end of period	1,122,675	$	7.07	$	1,502
Exercisable at end of period	846,175	$	7.47	$	940

(1) The intrinsic value of a stock option is the amount by which the current market value of the underlying stock exceeds the exercise price of the option. The total intrinsic value of stock options exercised during the fiscal years ended June 30, 2015, 2014 and 2013, were $641,000, $2,034,000 and $466,000, respectively. The total fair value of shares vested during the fiscal years ended June 30, 2015, 2014 and 2013, were $295,000, $182,000 and $148,000, respectively.

The estimated fair value as of the date options were granted during the periods presented using the Black-Scholes option-pricing model, was as follows:



	2015		2014		2013
Weighted average estimated fair value per
share of options granted during the period	$	4.04	$	3.18	$	2.27
Assumptions:
Dividend yield		-		2.10		-
Common stock price volatility		46.85%		38.88%		44.86%
Risk free rate of return		1.62%		1.53%		0.62%
Expected option term (in years)		6		5		5

The following table summarizes information about stock options at June 30, 2015:



					Options Outstanding				Options Exercisable
						Weighted	Weighted			Weighted
						Average	Average			Average
						Remaining	Exercise			Exercise
Range of Exercise Prices					Shares	Contractual Life	Price		Shares	Price

$	2.80	to	$	5.70	88,400	5.59	$	4.59	58,900	$	4.03
	5.83	to		8.81	237,091	3.80	$	7.31	200,341	$	7.54
	8.94	to		14.01	326,900	7.77	$	10.38	91,475	$	10.89
	14.33	to		14.33	6,250	0.11	$	14.33	6,250	$	14.33
$	2.80	to	$	14.33	658,641	5.97	$	8.53	356,966	$	7.94

Restricted Shares

The Company’s restricted stock and restricted stock units under the 2004 Plan have been awarded by three methods as follows: One, awards that are earned based on an individual’s achievement of performance goals during the initial fiscal year with either a subsequent one year service vesting period or with a one-third vesting requirement on the first, second and third anniversary of the issuance, provided the individual’s employment has not terminated prior to the vesting date and are freely transferable after vesting; two, awards that are earned based on the Company achieving certain revenue and operating income results with a subsequent one-third vesting requirement on the first, second and third anniversary of the issuance provided the individual’s employment has not terminated prior to the vesting date and are freely transferable after vesting; and three, awards to non-management members of the Board of Directors with a subsequent one-third vesting requirement on the first, second and third anniversary of the issuance provided the service of the non-management member of the Board of Directors has not terminated prior to the vesting date and are freely transferable after vesting. 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 non-cash stock-based compensation expense recorded for restricted stock awards for the fiscal years ended June 30, 2015, 2014 and 2013 was $209,000, $161,000 and $68,000, respectively. As of June 30, 2015, the total remaining unrecognized compensation cost related to restricted stock awards amounted to $357,000.

A summary of the status of restricted shares issued at June 30, 2015 is presented in the table below:



			Weighted Average
	Nonvested		Grant Date
	Shares		Fair Value
Nonvested at June 30, 2014		17,950	$	5.39
Granted		81,114		10.74
Vested		(20,950)		6.51
Forfeited or expired		(16,100)		10.07
Nonvested at June 30, 2015		62,014	$	10.80

Available Shares

At June 30, 2015, the 2004 Plan had 717,636 shares available for future grants, including restricted stock or stock options that could be issued in the first quarter of fiscal 2016.