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STOCK-BASED COMPENSATION AND INCENTIVE PERFORMANCE PLANS | 12 Months Ended
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Jun. 30, 2021
Share-based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION AND INCENTIVE PERFORMANCE PLANS | STOCK-BASED COMPENSATION AND INCENTIVE PERFORMANCE PLANS The Company has one stockholder approved plan, the Amended and Restated 2002 Long-Term Incentive and Stock Award Plan (the “2002 Plan”), under which the Company’s officers, senior management, other key employees, consultants and directors may be granted equity-based awards. The Company also grants equity awards under its 2019 Equity Inducement Award Program (the “2019 Inducement Program”) to induce selected individuals to become employees of the Company. The 2002 Plan and 2019 Inducement Program are collectively referred to as the “Stock Award Plans”. In conjunction with the Stock Award Plans, the Company maintains a long-term incentive program (the “LTI Program”) that provides for performance and market equity awards that can be earned over defined performance periods. There were 237, 990 and 2,106 shares underlying restricted stock awards (“RSAs”) or restricted share units (“RSUs”) granted under the Stock Award Plans during fiscal years 2021, 2020 and 2019, respectively, of which 51, 554 and 1,610, respectively, were granted under the LTI Program and are subject to the achievement of minimum performance goals or market conditions, with the remaining being service-based awards. For performance awards and market awards, the foregoing share figures are stated at target levels, and the awards generally provide for vesting at zero to 300% of the target level. There were no options granted under the Stock Award Plans during fiscal years 2021, 2020 and 2019. At June 30, 2021, there were 5,330 and 1,886 shares available for grant under the 2002 Plan and 2019 Inducement Program, respectively. The CEO Inducement Grant (discussed below) was granted outside of the Stock Award Plans. Restricted Stock Awards of restricted stock are either RSAs or RSUs that are issued at no cost to the recipient. RSA holders have all rights of a stockholder at the grant date, subject to certain restrictions on transferability and a risk of forfeiture. Shares underlying RSUs are not issued until vesting. Both award types are subject to continued employment and vesting conditions in accordance with provisions set forth in the applicable award agreements. The Company also grants market-based RSUs that vest contingent on meeting specific Total Shareholder Return (“TSR”) targets over a specified time period, and performance-based RSUs that vest contingent on meeting specific financial results within a specified time period. Performance-based and market-based RSUs are issued in the form of performance share units (“PSUs”). A summary of the restricted stock activity (includes all RSAs, RSUs and PSUs) for the last three fiscal years ended June 30 is as follows:
| 2021 |  | Weighted Average Grant Date Fair Value (per share) |  | 2020 |  | Weighted Average Grant Date Fair Value (per share) |  | 2019 |  | Weighted Average Grant Date Fair Value (per share)
Non-vested - beginning of period | 2,049 |  |  | $15.85 |  | 2,729 |  |  | $12.94 |  | 1,057 |  |  | $22.29
Granted | 237 |  |  | $36.13 |  | 990 |  |  | $17.36 |  | 2,457 |  |  | $11.84
Vested | (374) |  |  | $25.21 |  | (291) |  |  | $23.28 |  | (411) |  |  | $27.36
Forfeited | (132) |  |  | $17.18 |  | (1,379) |  |  | $8.80 |  | (374) |  |  | $18.33
Non-vested - end of period | 1,780 |  |  | $16.55 |  | 2,049 |  |  | $15.85 |  | 2,729 |  |  | $12.94
At June 30, 2021 and 2020, the table above includes a total of 1,382 and 1,384 shares (including the inducement grant of 350 shares made to the Company’s CEO), respectively, that represent the target number of shares that may be earned under non-vested performance equity awards that are eligible to vest at 300% of target. Vested shares during the year ended June 30, 2021 include a total of 20 shares under the 2018-2020 LTIP that vested at 150% of target based on achievement of the maximum relative TSR target. A summary of the fair value of restricted stock (includes all RSAs, RSUs and PSUs) granted and vested, and the tax benefit recognized from restricted stock vesting, for the last three fiscal years ended June 30 is as follows:
| Fiscal Year Ended June 30,
| 2021 |  | 2020 |  | 2019
Fair value of restricted stock granted | $ | 8,551 |  |  | $ | 17,179 |  |  | $ | 29,067 |
Fair value of restricted stock vested | $ | 15,847 |  |  | $ | 6,775 |  |  | $ | 11,232 |
Tax benefit recognized from restricted stock vesting | $ | 1,597 |  |  | $ | 939 |  |  | $ | 3,241 |
At June 30, 2021, $10,026 of unrecognized stock-based compensation expense related to non-vested restricted stock was expected to be recognized over a weighted average period of approximately 1.1 years. Long-Term Incentive Program The participants of the LTI Program include certain of the Company’s executive officers and other key executives. The LTI Program is administered by the Compensation Committee which is responsible for, among other items, selecting the specific performance measures for awards, setting the target performance required to receive an award after the completion of the performance period, and determining the specific payout to the participants. Any stock-based awards issued under the LTI Program are generally issued pursuant to and are subject to the terms and conditions of the 2002 Plan and 2019 Inducement Program, as applicable. The LTI Program consists of certain performance-based long-term incentive plans that provide for PSUs that can be earned over defined performance periods. •2019-2021 LTIP - Vesting is pursuant to the achievement of pre-established three-year compound annual TSR targets over the period from November 6, 2018 to November 6, 2021. The TSR levels are aligned with the CEO Inducement Gr ant (discussed below), with total shares eligible to vest ranging from zero to 300% of the target award amount. Certain shares are subject to a holding period of one year after the vesting date, resulting in an illiquidity discount being applied to the grant date fair value for such shares. There were 51, 554 and 912 PSUs granted during fiscal years 2021, 2020 and 2019, respectively, relating to the 2019-2021 LTIP. Grant date fair values are calculated using a Monte-Carlo simulation model. The weighted average grant date fair values per target share and related valuation assumptions were as follows:
| Fiscal Year ended June 30,
| 2021 |  | 2020 |  | 2019
Grant date fair value (per target share) | $32.13 |  | $10.92 |  | $6.91
Risk-free interest rate | 0.13 | % |  | 1.54 | % |  | 2.40 | %
Expected dividend yield | — |  | — |  | —
Expected volatility | 40.37 | % |  | 36.28 | % |  | 34.29 | %
Expected term | 1.17 years |  | 1.85 years |  | 2.67 years
•2018-2020 LTIP - V esting is pursuant to a defined calculation of relative TSR over the period from January 24, 2019 to June 30, 2020, with total shares eligible to vest ranging from zero to 150% of the grant. There were 45 PSUs granted during fiscal year 2019 with a grant date fair value of $18.32 per unit. No such awards were granted during fiscal 2020 or 2018. In the first quarter of fiscal 2021, the Compensation Committee determined that all outstanding awards under the 2018-2020 LTIP vested at 150% as a result of the maximum rel ative TSR target having been met. CEO Inducement Grant On November 6, 2018, the Company’s CEO, Mark L. Schiller received a market-based PSU award with a target payout of 350 shares of common stock and a maximum payout of 1,050 shares of common stock. The award will vest pursuant to the achievement of pre-established three-year compound annual TSR levels over the period from November 6, 2018 to November 6, 2021. No PSUs will vest if the three-year compound annual TSR is below 15%. These PSUs are subject to a holding period of one year after the vesting date. As such, an illiquidity discount was applied to the grant date fair value. The grant date fair value per target share and related valuation assumptions used in the Monte Carlo simulation to value this award were as follows:
Grant date fair value (per target share) | $21.63
Risk-free interest rate | 2.99 | %
Expected dividend yield | —
Expected volatility | 35.17 | %
Expected term | 3.00 years
The total grant date fair value of the award was $7,571. Total compensation cost related to this award recognized in the fiscal year ended June 30, 2021, 2020, 2019 and was $2,519, $2,526 and $1,636, respectively. This PSU award was granted outside of the Stock Award Plans. Separately, the Company also issued 79 three-year service-based RSAs to Mr. Schiller in November 2018 under the 2002 Plan. Other Grants From time to time, the Company issues PSUs to certain key executives which vest over a period of one to two years based upon the achievement of certain market and/or performance-based metrics being met. As of June 30, 2021 and 2020, there were 22 and 23 of such PSUs outstanding. Summary of Stock-Based Compensation Compensation cost and related income tax benefits recognized in the Consolidated Statements of Operations for stock-based compensation plans were as follows:
| Fiscal Year Ended June 30,
| 2021 |  | 2020 |  | 2019
Selling, general and administrative expense | $ | 15,659 |  |  | $ | 13,078 |  |  | $ | 9,471 |
Former Chief Executive Officer Succession Plan expense, net | — |  |  | — |  |  | 429 |
Discontinued operations | — |  |  | 544 |  |  | 165 |
Total compensation cost recognized for stock-based compensation plans | $ | 15,659 |  |  | $ | 13,622 |  |  | $ | 10,065 |
Related income tax benefit | $ | 1,296 |  |  | $ | 1,518 |  |  | $ | 1,189 |
Stock Options The Company did not grant any stock options in fis cal years 2021, 2020 or 2019, and there were no stock options exercised during these periods. There were 122 options outstanding at each of June 30, 2021, 2020 and 2019, relating to a grant under a prior Celestial Seasonings plan. Although no further awards can be granted under the prior Celestial Seasonings plan, the options outstanding continue in accordance with the terms of the plan and grant. For options outstanding and exercisable at June 30, 2021, the aggregate intrinsic value (the difference between the closing stock price on the last day of trading in the year and the exercise price) was $4,650, and the weighted average remaining contractual life was 10.0 years. The weighted average exercise price of these options was $2.26. At June 30, 2021, there was no unrecognized compensation expense related to stock option awards.

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