Annual report pursuant to Section 13 and 15(d)

Stockholders' Equity

v3.19.2
Stockholders' Equity
 12 Months Ended
Jun. 30, 2019
Equity [Abstract]  
Stockholders' Equity
STOCKHOLDERS’ EQUITY
Share Repurchase Program
In April 2018, the Company's Board of Directors approved a share repurchase program which authorized the Company to purchase up to 500,000 shares of its common stock from time to time, either in the open market or in block purchase transactions. The amount and timing of specific repurchases are subject to market conditions, applicable legal requirements and other factors.  As of June 30, 2019, no shares had been repurchased under the program.
2014 Stock Award and Incentive Plan
Prior to the spinoff, the Company’s Board of Directors ("Board") adopted and the Company's then sole stockholder approved the 2014 Stock Award and Incentive Plan, which was approved by the Company's stockholders in February 2015. On November 2, 2017, the Company's stockholders approved the amended and restated 2014 Stock Award and Incentive Plan (the "2014 Plan"), to (i) increase the available shares authorized for issuance under the plan by 525,000 shares, (ii) extend the term of the 2014 Plan until 2027, an additional five years, and (iii) eliminate provisions that add back to the share reserve shares surrendered or withheld to pay the exercise price of an option or withheld to cover tax withholding obligations for any type of award, and shares as to which a stock appreciation right is exercised that exceed the number of shares actually delivered.
Under the 2014 Plan, the Company may grant options and other equity awards as a means of attracting and retaining officers, employees, non-employee directors and consultants, to provide incentives to such persons, and to align the interests of such persons with the interests of stockholders by providing compensation based on the value of the Company's stock. Awards under the 2014 Plan may be granted in the form of incentive or non-qualified stock options, stock appreciation rights ("SARs"), restricted stock, restricted stock units, dividend equivalent rights and other stock-based awards (which may include outright grants of shares). The 2014 Plan also authorizes grants of performance-based cash incentive awards. The 2014 Plan is administered by the Compensation Committee of the Board of Directors, which, in its discretion, may select officers and other employees, directors (including non-employee directors) and consultants to the Company and its subsidiaries to receive grants of awards. The Board of Directors itself may perform any of the functions of the Compensation Committee under the 2014 Plan.
Under the 2014 Plan, the exercise price of options and base price of SARs, as set by the Compensation Committee, generally may not be less than the fair market value of the shares on the date of grant, and the maximum term of stock options and SARs is 10 years. The 2014 Plan limits the number of share-denominated awards that may be granted to any one eligible person to 250,000 shares in any fiscal year. Also, in the case of non-employee directors, the 2014 Plan limits the maximum grant-date fair value at $300,000 of stock-denominated awards granted to a director in a given fiscal year, except for a non-employee Chairman of the Board whose grant-date fair value maximum is $600,000 per fiscal year. The 2014 Plan will terminate when no shares remain available for issuance and no awards remain outstanding; however, the authority to grant new awards will terminate on December 13, 2022.
As of June 30, 2019, 408,395 shares were available for grant under the 2014 Plan.
Valuation and Significant Assumptions of Equity Awards Issued
The Company uses the Black-Scholes option pricing model, which uses various inputs such as the estimated common share price, the risk-free interest rate, volatility, expected life and dividend yield, all of which are estimates. The weighted-averages for key assumptions used in determining the fair value of options granted during the years ended June 30, 2019 and 2018 follows:
Years Ended June 30,
 
2019
 
2018
 
Average volatility
 
35.8
%

36.0
%
 
Risk-free interest rate
 
2.8
%

1.8
%
 
Weighted-average expected life in years
 
6.05


5.74

 
Estimated dividend annual yield rate
 
—
%

2.5
%
 

There are no awards with performance conditions nor awards with market conditions.
Stock Options
During the years ended June 30, 2019 and 2018, the Company incurred $1,096,539 and $1,191,106 of compensation expense related to stock options, respectively. As of June 30, 2019, there was total remaining compensation expense of $1.0 million related to employee stock options, which will be recorded over a weighted average period of approximately 1.8 years.
The following table summarizes the stock option activity for the year ended June 30, 2019.
 
 
Options
 
Weighted Average Exercise Price Per Share
 
Aggregate Intrinsic Value
(in thousands)
 
Weighted Average Grant Date Fair Value Per Award
Outstanding at June 30, 2018
 
842,515

 
$
17.59

 
$
821

 
$
5.99

Granted
 
115,050

 
$
13.38

 
 
 
 
Cancellations, expirations and forfeitures
 
(567
)
 
$
15.93

 
 
 
 
Outstanding at June 30, 2019
 
956,998

 
$
17.08

 
$
787

 
$
5.88

 
 
 
 
 
 
 
 
 
Exercisable at June 30, 2019
 
718,281

 
$
17.26

 
$
773

 
$
6.08

 
Following is a summary of the status of stock options outstanding at June 30, 2019
 
 
 
 
Options Outstanding
 
Options Exercisable
Exercise Price Ranges
 
Number of Shares Outstanding
 
Weighted Average Remaining Contractual Life (Years)
 
Weighted Average Exercise Price
 
Number of Shares Exercisable
 
Weighted Average Remaining Contractual Life (Years)
 
Weighted Average Exercise Price
From
 
To
 
 
 
 
 
 
$
—

 
$
10.00

 
134,239

 
3.35
 
$
8.39

 
134,239

 
3.35
 
$
8.39

$
10.01

 
$
15.00

 
253,838

 
6.83
 
$
12.75

 
115,555

 
4.08
 
$
12.20

$
15.01

 
$
25.00

 
468,921

 
7.15
 
$
20.12

 
393,487

 
7.05
 
$
20.20

$
25.01

 
$
60.00

 
100,000

 
6.65
 
$
25.50

 
75,000

 
6.65
 
$
25.50

 
 
 
 
956,998

 
6.48
 
$
17.08

 
718,281

 
5.84
 
$
17.26


Certain Anti-Takeover Provisions
The Company’s certificate of incorporation and by-laws contain certain anti-takeover provisions that could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire, control of the Company without negotiating with its Board. Such provisions could limit the price that certain investors might be willing to pay in the future for the Company’s securities. Certain of such provisions provide for a Board with staggered terms, allow the Company to issue preferred stock with rights senior to those of the common stock, or impose various procedural and other requirements which could make it more difficult for stockholders to effect certain corporate actions.