9. Stock Incentive Plan

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 4,881,620 Class A shares available for grant pursuant to the Incentive Plan as of June 30, 2020.

Restricted Stock Units

In May 2018, PAHC’s Compensation Committee approved the grant of 250,000 restricted stock units (“RSUs”) to an officer of the Company, pursuant to the Incentive Plan. Each RSU represents the right to receive a share of our common stock upon vesting. A portion of the RSUs are subject to performance-based vesting (the “Performance-Based RSUs”). The Performance-Based RSUs will vest in increments from 15% to 100% based on the 90‑day average of the Company’s common stock price from $30 to $80 ending on December 31, 2020. A portion of the RSUs are subject to time-based vesting (the“Time-Based RSUs”). The Time-Based RSUs will vest on December 31, 2020, provided the individual remains employed with the Company or is terminated under a qualifying termination.

We used a Monte Carlo simulation model to determine the grant date fair value of the Performance-Based RSUs. Assumptions used by the model were based on information as of the grant date and included: risk-free rate of return of 2.59%; expected volatility of 31.94%; and, an expected dividend yield of 0.95%. The risk-free rate of return is based on U.S. treasury yields for bonds with similar maturities. Expected volatility is based on the historical volatility of the Company’s common stock. The expected dividend yield considers estimated annual dividends and the closing share price of the underlying common stock.

The fair value of the Time-Based RSUs is equal to the closing market price of the underlying common stock on the grant date, less the present value of expected dividends over the vesting period.

The following table summarizes the activity related to RSUs:


		Grant Date
		Fair Value		Grant Date
	RSUs	per RSU Share		Fair Value
Performance-Based RSUs Granted May 2018	200,000	$	19.63	$	3,926
Time-Based RSUs Granted May 2018	50,000	$	41.10	$	2,055
Outstanding June 30, 2020 and 2019	250,000	$	23.92	$	5,981

We will recognize the total grant date fair value of the RSUs as stock-based compensation expense on a straight-line basis over the vesting period. Stock-based compensation expense related to RSUs was $2,259, $2,259 and $334 for the years ended June 30, 2020, 2019 and 2018, respectively. We expect stock-based compensation expense related to RSUs will be $1,129 in 2021.

Stock Options

There was no stock-based compensation expense related to employee stock options in the periods included in the consolidated financial statements and there was no stock option activity during 2020.