Stock Option Plan

12 Months Ended

Jun. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

In March 2008, our Board of Directors and stockholders adopted the 2008 Incentive Plan (the “Incentive Plan”). The Incentive Plan provides directors, officers, employees and consultants to the Company with opportunities to purchase common stock pursuant to options that may be granted, and receive grants of restricted stock and other stock-based awards granted, from time to time by the Board of Directors or a committee approved by the Board. The Incentive Plan provides for grants of stock options, stock awards and other incentives for up to 6,630,000 shares. There were 5,131,620 Class A shares available for grant pursuant to the Incentive Plan as of June 30, 2015.

In February 2009 and April 2013, PAHC’s Compensation Committee awarded stock options with an exercise price of $11.83 per share, pursuant to the Incentive Plan. In connection with the grants, we obtained third party valuation reports and determined that the exercise price per share was not less than the fair value of the common stock at the grant date. The weighted-average grant-date fair value of stock options was $0.99. The awards granted were non-qualified stock options that vested at various dates through March 2014. The options expire in February 2019. All stock options are exercisable for Class A common stock.

The Company recognized compensation expense for the options over the vesting period in selling, general and administrative expenses. As of June 30, 2015, there was no unrecognized compensation expense. Expense related to stock options for 2015, 2014 and 2013, was $0, $73 and $215, respectively. The following table summarizes the activity related to stock options during 2015:

Options	Shares		Weighted- Average Exercise Price Per Share
Outstanding, June 30, 2014		1,498,380		$	11.83
Granted		—			—
Exercised		(112,840)		$	11.83
Forfeited or expired		—			—
Outstanding, June 30, 2015		1,385,540		$	11.83
Exercisable, June 30, 2015		1,385,540		$	11.83

All options were fully vested and exercisable at June 30, 2015. At June 30, 2015, options outstanding and exercisable had a weighted average remaining contractual life was 3.7 years, and had a $37,562 aggregate intrinsic value, based on the market price as of that date, less the exercise price.

The Company uses the Black-Scholes option pricing model for determining the fair value of option grants. The following assumptions were used in the Black-Scholes model in determining the fair value of the most recently granted stock options:

			2013
Risk-free rate of return			2.70%
Expected life			3.0 to 7.5 years
Expected volatility			35%−50%
Expected dividend yield			0.00%

The risk-free rate of return is based on U.S. treasury rates, for bonds with similar maturities, as of the grant date. The expected life is based on historical turnover rates by employee classification. Expected volatility is estimated based on implied volatility and a comparison to similar publicly traded companies in similar industries. At the dates of the grants, the expected dividend yield assumed the Company would not pay dividends for the expected life of the options.