Stock Based Compensation (Text Block)

12 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

The Company's pre-tax operating income for the fiscal years ended June 30, 2021, 2020, and 2019 includes $20,746, $16,883, and $12,589 of equity-based compensation costs, respectively, of which $18,817, $15,148, and $10,828 relates to the restricted stock plans, respectively. Costs are recorded net of estimated forfeitures. The total income tax benefits from equity-based compensation for the fiscal years ended June 30, 2021, 2020, and 2019 were $3,258, $3,072, and $7,284, respectively. These income tax benefits included income tax net excess benefits from stock option exercises and restricted stock vestings of $719, $340, and $6,191 for the fiscal years ended June 30, 2021, 2020, and 2019, respectively.

2015 Equity Incentive Plan

On November 10, 2015, the Company adopted the 2015 Equity Incentive Plan ("2015 EIP") for its employees and non-employee directors. The plan allows for grants of stock options, stock appreciation rights, restricted stock shares or units, and performance shares or units. The maximum number of shares authorized for issuance under the plan is 3,000. For stock options, terms and vesting periods of the options were determined by the Compensation Committee of the Board of Directors when granted. The option period must expire not more than ten years from the options grant date. The options granted under this plan are exercisable beginning three years after grant at an exercise price equal to 100% of the fair market value of the stock at the grant date. The options terminate upon surrender of the option, ninety days after termination of employment, upon the expiration of one year following notification of a deceased optionee, or 10 years after grant.

A summary of option plan activity under the plan is as follows:


	Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding July 1, 2018	52	$	62.65
Granted	—	—
Forfeited	—	—
Exercised	(20)	23.65
Outstanding July 1, 2019	32	87.27
Granted	—	—
Forfeited	—	—
Exercised	(10)	87.27
Outstanding July 1, 2020	22	87.27
Granted	—	—
Forfeited	—	—
Exercised	—	—
Outstanding June 30, 2021	22	$	87.27	$	1,653
Vested and Expected to Vest June 30, 2021	22	$	87.27	$	1,653
Exercisable June 30, 2021	22	$	87.27	$	1,653

There were no options granted in fiscal 2021, 2020, and 2019.

The Company utilized a Black-Scholes option pricing model to estimate fair value of the stock option grants at the grant date. All remaining options were granted on July 1, 2016. Assumptions such as expected life, volatility, risk-free interest rate, and dividend yield impact the fair value estimate. These assumptions are subjective and generally require significant analysis and judgment to develop. The risk-free interest rate used in the Company's estimate was determined from external data, while volatility, expected life, and dividend yield assumptions were derived from its historical experience with share-based payment arrangements. The appropriate weight to place on historical experience is a matter of judgment, based on relevant facts and circumstances.

At June 30, 2021, there was no compensation cost yet to be recognized related to outstanding options.

The total intrinsic value of options exercised was $809, and $2,289 for the fiscal years ended June 30, 2020, and 2019, respectively. There were no options exercised for the fiscal year ended June 30, 2021.

Restricted Stock Plan and 2015 Equity Incentive Plan

The Restricted Stock Plan was adopted by the Company on November 1, 2005, for its employees. The plan expired on November 1, 2015. Up to 3,000 shares of common stock were available for issuance under the plan. The 2015 EIP was adopted by the Company on November 10, 2015 for its employees. Up to 3,000 shares of common stock are available for issuance under the 2015 EIP. Upon issuance, shares of restricted stock are subject to forfeiture and to restrictions which limit the sale or transfer of the shares during the restriction period. The restrictions are lifted over periods ranging from 3 years to 5 years from grant date.

The following table summarizes non-vested share awards activity:


Share awards	Shares	Weighted Average Grant Date Fair Value
Outstanding July 1, 2018	23	$	81.33
Granted	—	—
Vested	(17)	79.41
Forfeited	—	—
Outstanding July 1, 2019	6	87.27
Granted	—	—
Vested	(6)	87.27
Forfeited	—	—
Outstanding July 1, 2020 and June 30, 2021	—	—

The non-vested share awards granted prior to July 1, 2016 did not participate in dividends during the restriction period. As a result, the weighted-average fair value of the non-vested share awards was based on the fair market value of the Company’s equity shares on the grant date, less the present value of the expected future dividends to be declared during the restriction period, consistent with the methodology for calculating compensation expense on such awards. The non-vested share awards granted after July 1, 2016 did participate in dividends during the restriction period and the weighted-average fair value of such participating awards was based on the fair market value on the grant date.

An amendment to the Restricted Stock Plan was adopted by the Company on August 20, 2010. Unit awards were made to employees remaining in continuous employment throughout the performance period and vary based on the Company’s percentile ranking in Total Shareholder Return (“TSR”) over the performance period compared to a peer group, or peer groups, of companies. TSR is defined as the change in the stock price through the performance period plus dividends per share paid during the performance period, all divided by the stock price at the beginning of the performance period. It is the intention of the Company to settle the unit awards in shares of the Company’s stock. Certain Restricted Stock Unit awards are not tied to performance goals, and for such awards, vesting generally occurs over a period of 1 to 3 years.

The following table summarizes non-vested unit awards as of June 30, 2021, as well as activity for the fiscal year then ended:


Unit awards	Shares	Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
Outstanding July 1, 2018	351	$	83.37
Granted1	80	169.53
Vested	(129)	82.06
Forfeited2	(4)	92.32
Outstanding July 1, 2019	298	107.00
Granted1	139	157.94
Vested	(69)	98.25
Forfeited2	(61)	85.33
Outstanding July 1, 2020	307	136.41
Granted1	113	170.69
Vested	(124)	111.08
Forfeited2	(2)	140.46
Outstanding June 30, 2021	294	$160.22		$48,173

1Granted includes restricted stock unit awards and performance unit awards at 100% achievement.

2Forfeited includes restricted stock unit awards and performance unit awards forfeited for service requirements not met and performance unit awards not settled due to underachievement of performance measures.

The 113 unit awards granted in fiscal 2021 had service requirements and performance measures, with 79 only having service requirements. Those with only service requirements were valued at the weighted-average fair value of the non-vested units based on the fair market value of the Company’s equity shares on the grant date, less the present value of expected future dividends to be declared during the vesting period, consistent with the methodology for calculating compensation expense on such awards. The remaining 34 unit awards granted in fiscal 2021 had performance measures along with service requirements, all of which were valued using a Monte Carlo pricing model as of the measurement date customized to the specific provisions of the Company’s plan design to value the unit awards as of the grant date. Per the Company's award settlement provisions, approximately half of the awards that utilize a Monte Carlo pricing model were valued at grant on the basis of TSR in comparison to the compensation peer group approved by the Compensation Committee of the Company's Board of Directors for fiscal 2021, and the other half of the awards utilizing a Monte Carlo pricing model were valued at grant on the basis of TSR in comparison to the Standard & Poor's 1500 Information Technology Index ("S&P 1500 IT Index") participants.

The weighted average assumptions used in the Monte Carlo pricing model to estimate fair value at the grant dates for awards with performance targets and service requirements are as follows:


	Year Ended June 30,
	2021		2020		2019
Compensation peer group:
Volatility	25.2	%	16.8	%	15.3	%
Risk free interest rate	0.11	%	1.34	%	2.89	%
Dividend yield	1.0	%	1.1	%	0.9	%


S&P 1500 IT Index:
Volatility	25.2	%	16.8	%	—	%
Risk free interest rate	0.11	%	1.34	%	—	%
Dividend yield	1.0	%	1.1	%	—	%

At June 30, 2021, there was $19,352 of compensation expense, excluding forfeitures, that has yet to be recognized related to non-vested restricted stock unit awards, which will be recognized over a weighted-average remaining contractual term of 1.22 years.

The fair value of restricted shares and units at vest date totaled $21,652, $11,248, and $34,645 for the fiscal years ended June 30, 2021, 2020, and 2019, respectively.