Commitments and Contingencies
|12 Months Ended|
Jun. 30, 2021
|Commitments And Contingencies Disclosure [Abstract]|
|Commitments and Contingencies||
15. COMMITMENTS AND CONTINGENCIES
Employment and Non-Compete Agreements
At June 30, 2021, the Company was a party to various employment agreements and non-compete and/or non-solicitation agreements with its employees, including employment agreements with (a) Thor Gjerdrum, our President, which expires on June 30, 2022, (b) Greg Roberts, our Chief Executive Officer and Brian Aquilino, our Chief Operating Officer, which expire on June 30, 2023, and (c) Michael Wittmeyer, Chief Executive Officer of JMB, which expires on June 30, 2024. The employment agreements provide for minimum salary levels, incentive compensation and severance benefits, among other items.
Employee Benefit Plan
The Company maintains an employee retirement savings plan for United States employees under the Internal Revenue Code section 401(k). There is an automatic default contribution for newly eligible employees in which 3% will be deducted pre-tax from the employee’s pay and invested in their default fund unless directed otherwise. Employees are eligible to participate in the plan after three complete calendar months of service by the next plan entry date and are 21 years of age. All contributions are immediately vested. Employees' contributions are discretionary to a maximum of 90% of compensation. For all plan members, the Company contributes 30% of the eligible employees' contributions on the first 60% of the participants' compensation to the IRS maximum annual contribution. The Company's matching 401(k) contributions totaled $382,000 and $276,000 for the years ended June 30, 2021 and 2020, respectively.
AMST entered into an exclusive supplier agreement, with an unrelated third-party, whereby this supplier agreed to supply all of AMST's requirements for refined silver used for producing the silver products. The term of the agreement is not explicitly defined and contains automatic two-year term renewals (unless terminated prior thereto). Pricing under the agreement is subject to adjustments every six months.
A-Mark has also guaranteed AMST's obligations under its agreement with this supplier to lease 100,000 ounces of refined silver. The lease term maturity date is not explicitly defined and contains automatic one year renewal (unless terminated prior thereto), and the lease fees are subject to adjustments every six months.
The Company is from time to time party to various lawsuits, claims and other proceedings that arise in the ordinary course of its business. In accordance with GAAP, we review the need for any loss contingency reserves and establish reserves when, in the opinion of management, it is probable that a matter would result in a liability and the amount of loss, if any, can be reasonably estimated. Additionally, we record receivables for insurance recoveries relating to litigation-related losses and expenses if and when such amounts are covered by insurance and recovery of such losses or expenses are due. We review our litigation matters each quarter to assess whether loss contingency reserves are required in accordance with GAAP based on our review.
The Company remains exposed to the effects of the COVID-19 pandemic. The pandemic has caused significant disruption in the financial markets both globally and in the United States. The resulting macroeconomic events have contributed to an increase in the business conducted by the Company, but also pose certain risks and uncertainties for the Company. The Company does not know how long the COVID-19 pandemic will continue, the extent to which the effects that the Company has experienced from the pandemic thus far will persist, or whether other effects on the Company and its businesses will materialize in the short or long term.
The entire disclosure for commitments and contingencies.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef