Contributions to the ESOP and shares released from the suspense account are allocated among participants in proportion to their compensation, relative to total compensation of all active participants. Participants will vest 100% in their accrued benefits under the employee stock ownership plan after six vesting years, with prorated vesting in years two through five. Vesting is accelerated upon retirement, death or disability of the participant or a change in control of the Association. Forfeitures will be reallocated to remaining plan participants. Benefits may be payable upon retirement, death, disability, separation from service, or termination of the ESOP. Since the Association’s annual contributions are discretionary, benefits payable under the ESOP cannot be estimated. Participants receive the shares at the end of employment.

The Company is accounting for its ESOP in accordance with ASC Topic 718,

Employers Accounting for Employee Stock Ownership Plans

. Accordingly, the debt of the ESOP is eliminated in consolidation and the shares pledged as collateral are reported as unearned ESOP shares in the consolidated balance sheets. Contributions to the ESOP shall be sufficient to pay principal and interest currently due under the loan agreement. As shares are committed to be released from collateral, the Company reports compensation expense equal to the average market price of the shares for the respective period, and the shares become outstanding for earnings per share computations. Dividends, if any, on unallocated ESOP shares are recorded as a reduction of debt and accrued interest.

A summary of ESOP shares at March 31, 2023 and June 30, 2022 are as follows (dollars in thousands):


	March 31, 2023		June 30, 2022
Allocated shares		162,986		160,772
Shares committed for release		14,434		19,245
Unearned shares		158,771		173,205

Total ESOP shares		336,191		353,222

Fair value of unearned ESOP shares (1)	$	2,467	$	3,291

(1)	Based on closing price of $15.54 and $19.00 per share on March 31, 2023, and June 30, 2022, respectively.

During the nine months ended March 31, 2023, 9,348 ESOP shares were paid to ESOP participants due to separation from service and 7,683 shares were transferred out as a result of participant diversification. During the nine months ended March 31, 2022, 3,862 ESOP shares were paid to ESOP participants due to separation from service.

The IF Bancorp, Inc. 2012 Equity Incentive Plan (the “Equity Incentive Plan”) was approved by stockholders in 2012 for a

ten-year

period which ended in November 2022. The purpose of the Equity Incentive Plan was to promote the long-term financial success of the Company and its Subsidiaries by providing a means to attract, retain and reward individuals who contribute to such success and to further align their interests with those of the Company’s stockholders. The Equity Incentive Plan authorized the issuance or delivery to participants of up to 673,575 shares of the Company common stock pursuant to grants of incentive and

non-qualified

stock options, restricted stock awards and restricted stock unit awards, provided that the maximum number of shares of Company common stock that may be delivered pursuant to the exercise of stock options (all of which may be granted as incentive stock options) was 481,125 and the maximum number of shares of Company stock that may be issued as restricted stock awards or restricted stock units was 192,450. This plan was replaced by the 2022 Equity Incentive Plan when the stockholders approved the new plan on November 21, 2022. The new plan authorizes the issuance or delivery to participants of up to 264,850 shares of the Company common stock pursuant to grants of incentive and

non-qualified

On December 10, 2013, 85,500 shares of restricted stock and 167,000 in stock options were awarded to senior officers and directors of the Association. These shares of restricted stock vest in equal installments over 10 years and the stock options vest in equal installments over 7 years. Vesting of both the restricted stock and options started in December 2014. On December 10, 2015, 16,900 shares of restricted stock were awarded to senior officers and directors of the Association.

These shares of restricted stock vest in equal installments over 8 years, starting in December 2016. On September 9, 2022, 53,000 shares of restricted stock were awarded to senior officers and directors of the Association. These shares of restricted stock will vest in equal installments over 5 years, starting in September 2023. No shares have been granted from the 2022 Equity Incentive Plan as of March 31, 2023, so there are 211,880 shares of restricted stock and 52,970 stock option shares available for future grants under this plan.

The following table summarizes stock option activity for the nine months ended March 31, 2023 (dollars in thousands):


	Options		Weighted-Average Exercise Price/Share		Weighted-Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value
Outstanding, June 30, 2022		134,143	$	16.63
Granted		—		—
Exercised		44,000		16.63
Forfeited		—		—

Outstanding, March 31, 2023		90,143	$	16.63		0.7	$	—	(1)

Exercisable, March 31, 2023		90,143	$	16.63		0.7	$	—	(1)

(1)	Based on closing price of $15.54 per share on March 31, 2023.

Intrinsic value for stock options is defined as the difference between the current market value and the exercise price. There were no stock options granted during the nine months ended March 31, 2023.

No stock options vested during the nine months ended March 31, 2023 and 2022. Stock-based compensation expense and

related tax benefit were zero for stock options for the nine months ended March 31, 2023 and 2022. Compensation

cost related to

non-vested

stock options was recognized over the seven-year vesting period ending in December, 2020, leaving no unrecognized compensation cost at March 31, 2023.

The following table summarizes

non-vested

restricted stock activity for the nine months ended March 31, 2023:


	Shares		Weighted-Average Grant-Date Fair Value
Balance, June 30, 2022		18,876	$	16.82
Granted		53,000		19.10
Forfeited		—		—
Earned and issued		9,562		16.83

Balance, March 31, 2023		62,314	$	18.76

The fair value of the restricted stock awards is amortized to compensation expense over the vesting period and is based on the market price of the Company’s common stock at the date of grant multiplied by the number of shares granted that are expected to vest. At the date of grant the par value of the shares granted was recorded in equity as a credit to common stock and a debit to

paid-in

capital. Stock-based compensation expense and related tax benefit for restricted stock, which was recognized in

non-interest

expense, was $234,000 and $67,000, respectively, for the nine months ended March 31, 2023, and was $119,000 and $34,000, respectively, for the nine months ended March 31, 2022. Unrecognized compensation expense for

non-vested

restricted stock awards was $1,012,000 at March 31, 2023, and is expected to be recognized over 4.4 years with a corresponding credit to

paid-in

capital.