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Stock-Based Incentive Plan
 12 Months Ended
Jun. 30, 2021
Share-based Payment Arrangement [Abstract]  
Stock-Based Incentive Plan Stock-Based Incentive Plan
The Evolution Petroleum Corporation 2016 Equity Incentive Plan (“2016 Plan”), approved in the December 2016 annual meeting, authorized the issuance of 1,100,000 shares of common stock prior to its expiration on December 8, 2026. Incentives under the 2016 Plan may be granted to employees, directors, and consultants of the Company in any one or a combination of the following forms: incentive stock options and non-statutory stock options, stock appreciation rights, restricted stock awards and restricted stock unit awards, performance share awards, performance cash awards, and other forms of incentives valued in whole or in part by reference to, or otherwise based on, our common stock, including its appreciation in value. On December 9, 2020, an amendment to the 2016 Plan was approved by our stockholders which increased the number of shares available for issuance by 2,500,000 shares. There were 2,206,294 shares available for grant under the 2016 Plan as of June 30, 2021.
Restricted Stock and Contingent Restricted Stock
The Company has awarded grants of both Restricted Stock and Contingent Restricted Stock as part of its long-term incentive plan. Such grants, which expire after a maximum of four years if unvested, contain service-based, performance-based, and market-based vesting provisions. The common shares underlying the Restricted Stock grants are issued on the date of grant. Contingent Restricted Stock grants vest only upon the attainment of higher performance-based or market-based vesting thresholds and are issued only upon vesting. Shares underlying Contingent Restricted Stock awards are reserved from the Plan they were granted under.
During the year ended June 30, 2021, the Company granted 314,955 service-based restricted stock awards primarily to employees under its long term incentive program together with annual awards to its directors. In addition, under this program, the Company granted 246,160 market-based restricted stock awards and 123,080 Contingent Restricted Stock awards to employees. In addition to the foregoing, in connection with the retirement of the Company's former Chief Financial Officer, vesting was accelerated as to 50,524 aggregate shares of service- and market-based equity awards (with a weighted average fair value of $5.15 per share) which, for accounting purposes, was treated as a cancellation and replacement of the same number of awards which had a fair value of $2.79 per share.
During the year ended June 30, 2020, the Chief Executive Officer upon his July 2019 employment received 48,872 shares of service-based restricted common stock which vests in three equal amounts on June 30, 2020, 2021, and 2022; he was also awarded a total of 200,000 market-based Contingent Restricted Stock units consisting of four equal tranches, each of which may vest only if its respective stock price requirement is met before the award term expires. Each tranche has a separate stated price requirement and respective vesting will occur only if, before July 1, 2023, the ninety-day trailing average Company stock share price equals or exceeds its tranche price requirement. We also granted 52,119 service-based and 104,236 market-based Restricted Stock awards to our employees as well as 56,395 serviced-based awards to the company's directors.
Service-based awards vest with continuous employment by the Company, generally in annual installments over terms of three to four years. Awards to the Company's directors have one-year cliff vesting. Restricted Stock grants, which vest based on service, are valued at the fair market value of the Company’s common stock on the date of grant and amortized over the service period.
Performance-based grants vest upon the attainment of earnings, revenue, and other operational goals and require that the recipient remain an employee or director of the Company through the vesting date. The Company recognizes compensation expense for performance-based awards ratably over the expected vesting period based on the grant date fair value of the Company’s common stock and when it is deemed probable, for accounting purposes, that the performance criteria will be achieved. The expected vesting period may be deemed to be shorter than the term of the award. As of June 30, 2021, there were no performance-based awards outstanding.
Many of our past market-based awards could vest if their respective two- or three-year trailing total returns on the Company’s common stock exceed the corresponding total returns of various quartiles of indices consisting of peer companies. Additionally, more recent market-based awards vest when the average of the Company's closing stock price over a defined quarterly measurement period meets or exceeds a required stock price. The third-party independent assessment of fair values and expected vesting periods of these awards are determined using a Monte Carlo simulation based on the historical volatility of the Company's total return compared to the historical volatilities of the other companies in the index. Compensation expense for market-based awards is recognized over the expected vesting period using the straight-line method, so long as the holder remains an employee or director of the Company. Total compensation expense is based on the fair value of the awards at the date of grant and is independent of vesting or expiration of the awards, except for termination of service.
For market-based awards granted during the years ended June 30, 2021 and 2020, the assumptions used in the Monte Carlo simulation valuations, expected lives and fair values were as follows:
Year Ended June 30,
20212020
Weighted average fair value of market-based awards granted$3.08 $3.79 
Risk-free interest rate0.23 %
1.65% to 1.87%
Expected life in years2.56
1.35 to 2.56
Expected volatility56.9 %
38.6% to 43.7%
Dividend yield3.2 %
6% to 7.2%
Unvested Restricted Stock awards at June 30, 2021 consisted of the following:
Award TypeNumber of
Restricted
Shares		Weighted
Average
Grant-Date
Fair Value
Service-based awards348,762 $3.37 
Market-based awards320,533 3.38 
Unvested at June 30, 2021669,295 $3.37 
The following table sets forth the Restricted Stock transactions for the year ended June 30, 2021:
Number of
Restricted
Shares		Weighted
Average
Grant-Date
Fair Value		Unamortized Compensation Expense at June 30, 2021Weighted Average Remaining Amortization Period (Years)
Unvested at July 1, 2020285,028 $5.53 $— 
Service-based shares granted365,479 2.97 
Market-based shares granted246,160 3.07 
Vested(176,848)5.09 
Forfeited(50,524)5.15 
Unvested at June 30, 2021669,295 $3.37 $1,530,550 1.88
The following is a summary of Restricted Stock that vested during the last two fiscal years:
Year Ended June 30,
20212020
Vesting-date intrinsic value of Restricted Stock$570,711 $477,647 
Grant-date fair value of vested Restricted Stock$900,007 $748,893 
Number of awards that vested176,848 104,159 
Unvested Contingent Restricted stock awards table below consists solely of market-based awards for the year ended June 30, 2021:
 Number of
Restricted
Stock Units		Weighted
Average
Grant-Date
Fair Value		Unamortized Compensation Expense at June 30, 2021Weighted Average Remaining Amortization Period (Years)
Unvested at July 1, 2020200,000 $3.50 
Market-based awards granted123,080 1.76 
Vested — — 
Unvested at June 30, 2021323,080 $2.84 $169,257 2.00
All of these outstanding awards at June 30, 2021 are market-based awards.
The following is a summary of Contingent Restricted Stock vestings for the last two fiscal years:
Year Ended June 30,
20212020
Vest-date intrinsic value of Contingent Restricted Stock$— $60,225 
Grant-date fair value of vested Contingent Restricted Stock$— $34,734 
Number of awards that vested— 10,156 
Stock-based Compensation Expense
For the years ended June 30, 2021, and 2020, we recognized stock-based compensation expense related to Restricted Stock and Contingent Restricted Stock grants of $1,257,684 and $1,285,663, respectively.