XML 31 R20.htm IDEA: XBRL DOCUMENT
v3.21.1

Share-Based Compensation | 9 Months Ended
--- | ---
Mar. 31, 2021
Share-based Payment Arrangement [Abstract] |
Share-Based Compensation | Share-based Compensation Farmer Bros. Co. Long-Term Incentive Plan As of March 31, 2021, there were 666,665 shares available under the 2017 Plan including shares that were forfeited under the prior plans for future issuance. As of March 31, 2021, there were 171,371 shares available under the 2020 Inducement Plan. Non-qualified stock options with time-based vesting (“NQOs”) One-third of the total number of shares subject to each stock option vest ratably on each of the first three anniversaries of the grant date, contingent on continued employment, and subject to accelerated vesting in certain circumstances. Following are the assumptions used in the Black-Scholes valuation model for NQOs granted during the nine months ended March 31, 2021:
|  | Nine Months Ended March 31, 2021
Weighted average fair value of NQOs |  | $ | 4.60 |
Risk-free interest rate |  | 0.29 | %
Dividend yield |  | — | %
Average expected term |  | 4.6 years
Expected stock price volatility |  | 35.4 | %
The following table summarizes NQO activity for nine months ended March 31, 2021:
Outstanding NQOs: |  | Number of NQOs |  | Weighted Average Exercise Price ($) |  |  |  | Weighted Average Remaining Life (Years) |  | Aggregate Intrinsic Value ($ in thousands)
Outstanding at June 30, 2020 |  | 528,958 |  |  | 13.92 |  |  |  | 6.21 |  | 55 |
Granted |  | 29,761 |  |  | 6.72 |  |  |  | — |  | — |
Exercised |  | — |  |  | — |  |  |  | — |  | — |
Forfeited |  | (11,358) |  |  | 16.62 |  |  |  | — |  | — |
Expired |  | (7,938) |  |  | 28.51 |  |  |  | — |  | — |
Outstanding at March 31, 2021 |  | 539,423 |  |  | 13.25 |  |  |  | 5.55 |  | 440 |
Exercisable at March 31, 2021 |  | 153,230 |  |  | 16.13 |  |  |  | 5.24 |  | — |
The weighted-average grant-date fair value of options granted during nine months ended March 31, 2021 was $2.36. The aggregate intrinsic values outstanding at the end of period in the table above represent the total pretax intrinsic values, based on the Company’s closing stock price of $10.44 at March 31, 2021 and $7.34 at June 30, 2020, representing the last trading day of the respective periods, which would have been received by NQO holders had all award holders exercised their NQOs that were in-the-money as of those dates. The aggregate intrinsic value of NQO exercises in nine months ended March 31, 2021 represents the difference between the exercise price and the value of the Company’s common stock at the time of exercise. NQOs outstanding that are expected to vest are net of estimated forfeitures. The were no options exercised during nine months ended March 31, 2021. The Company received $129.3 thousand in proceeds from exercise of vested NQOs during the nine months ended March 31, 2020. At March 31, 2021 and June 30, 2020, respectively, there was $1.2 million and $1.7 million of unrecognized NQO compensation cost. The unrecognized NQO compensation cost at March 31, 2021 is expected to be recognized over the weighted average period of 1.6 years. Total compensation expense for NQOs was $167.7 thousand and $167.3 thousand for the three months ended March 31, 2021 and 2020, respectively. Total compensation expense for NQOs was $586.8 thousand and $444.9 thousand for the nine months ended March 31, 2021 and 2020, respectively. Non-qualified stock options with performance-based and time-based vesting (“PNQs”) The following table summarizes PNQ activity for the nine months ended March 31, 2021:
Outstanding PNQs: |  | Number of PNQs |  | Weighted Average Exercise Price ($) |  |  |  | Weighted Average Remaining Life (Years) |  | Aggregate Intrinsic Value ($ in thousands)
Outstanding at June 30, 2020 |  | 13,630 |  |  | 28.60 |  |  |  | 2.36 |  | — |
Granted |  | — |  |  | — |  |  |  | — |  | — |
Exercised |  | — |  |  | — |  |  |  | — |  | — |
Forfeited |  | — |  |  | — |  |  |  | — |  | — |
Expired |  | (1,880) |  |  | 21.33 |  |  |  | — |  | — |
Outstanding at March 31, 2021 |  | 11,750 |  |  | 29.76 |  |  |  | 2.16 |  | — |
Exercisable at March 31, 2021 |  | 6,942 |  |  | 28.40 |  |  |  | 1.89 |  | — |
The aggregate intrinsic values outstanding at the end of each fiscal period in the table above represent the total pretax intrinsic values, based on the Company’s closing stock price of $10.44 at March 31, 2021 and $7.34 at June 30, 2020, representing the last trading day of the respective fiscal periods, which would have been received by PNQ holders had all award holders exercised their PNQs that were in-the-money as of those dates. The aggregate intrinsic value of PNQ exercises in the nine months ended March 31, 2021 represents the difference between the exercise price and the value of the Company’s common stock at the time of exercise. PNQs outstanding that are expected to vest are net of estimated forfeitures. There were no options exercised during nine months ended March 31, 2021 and 2020. At March 31, 2021 and June 30, 2020, there was no unrecognized PNQ compensation cost. There was no compensation expense related to PNQs in the three months ended March 31, 2021 and 2020. Total compensation expense related to PNQs in the nine months ended March 31, 2021 and 2020 was zero and $18.3 thousand, respectively. Restricted Stock The following table summarizes restricted stock activity for the nine months ended March 31, 2021:
Outstanding and Nonvested Restricted Stock Awards: |  | Shares Awarded |  | Weighted Average Grant Date Fair Value ($) |  |  |  |
Outstanding and nonvested at June 30, 2020 |  | 218,604 |  |  | 13.00 |  |  |  |  |
Granted |  | 709,473 |  |  | 5.05 |  |  |  |  |
Vested/Released |  | (81,254) |  |  | 13.56 |  |  |  |  |
Cancelled/Forfeited |  | (37,505) |  |  | 3.81 |  |  |  |  |
Outstanding and nonvested at March 31, 2021 |  | 809,318 |  |  | 5.31 |  |  |  |  |
The total grant-date fair value of restricted stock granted during the nine months ended March 31, 2021 was $3.6 million. At March 31, 2021 and June 30, 2020, there was $3.6 million and $1.7 million, respectively, of unrecognized compensation cost related to restricted stock. The unrecognized compensation cost related to restricted stock at March 31, 2021 is expected to be recognized over the weighted average period of 1.5 years. Total compensation expense for restricted stock was $0.4 million and $0.3 million, respectively, in the three months ended March 31, 2021 and 2020. Total compensation expense for restricted stock was $1.5 million and $0.7 million, respectively, in the nine months ended March 31, 2021 and 2020. Performance-Based Restricted Stock Units (“PBRSUs”) The following table summarizes PBRSU activity for the nine months ended March 31, 2021:
Outstanding and Nonvested PBRSUs: |  | PBRSUs Awarded(1) |  | Weighted Average Grant Date Fair Value ($) |  |  |  |
Outstanding and nonvested at June 30, 2020 |  | 81,337 |  |  | 15.78 |  |  |  |  |
Granted(1) |  | 306,095 |  |  | 4.10 |  |  |  |  |
Vested/Released |  | (805) |  |  | 31.70 |  |  |  |  |
Cancelled/Forfeited |  | (4,232) |  |  | 18.50 |  |  |  |  |
Outstanding and nonvested at March 31, 2021 |  | 382,395 |  |  | 6.30 |  |  |  |  |
_____________ (1) The target number of PBRSUs is presented in the table. Under the terms of the awards, the recipient may earn between 0% and 150% of the target number of PBRSUs depending on the extent to which the Company meets or exceeds the achievement of the applicable financial performance goals. The total grant-date fair value of PBRSUs granted during the nine months ended March 31, 2021 was $1.3 million. At March 31, 2021 and June 30, 2020, there was $1.2 million and $0.5 million, respectively, of unrecognized PBRSU compensation cost. The unrecognized PBRSU compensation cost at March 31, 2021 is expected to be recognized over the weighted average period of 2.7 years. Total compensation expense for PBRSUs was $91.1 thousand for the three months ended March 31, 2021. As of March 31, 2021, the Company reversed the previously recognized nonvested compensation expense of $295.8 thousand for awards granted prior to fiscal 2021 since it was deemed not probabl e that the Company will achieve the target performance conditions. Total PBRSUs compensation expense for the three and nine months ended March 31, 2020 was $17.9 thousand and $128.0 thousand, respectively. Cash-Settled Restricted Stock Units (“CSRSUs”) In December 2020, the Company granted CSRSUs under the 2017 Plan to certain employees. CSRSUs vest in equal installments over a three-year period from the grant date, and are cash-settled upon vesting based on the Company’s common stock closing share price on the vesting date. The CSRSUs are accounted for as liability awards, and compensation expense is measured at fair value on the date of grant and recognized on a straight-line basis over the vesting period net of forfeitures. Compensation expense is remeasured at each reporting date with a cumulative adjustment to compensation cost during the period based on changes in the Company’s common stock closing share price. The following table summarizes CSRSU activity for the nine months ended March 31, 2021:
Outstanding and Nonvested CSRSUs: |  | CSRSUs Awarded |  | Weighted Average Grant Date Fair Value ($) |  |  |  |
Outstanding and nonvested at June 30, 2020 |  | — |  |  | — |  |  |  |  |
Granted |  | 232,002 |  |  | 4.31 |  |  |  |  |
Vested/Released |  | — |  |  | — |  |  |  |  |
Cancelled/Forfeited |  | (15,660) |  |  | 4.31 |  |  |  |  |
Outstanding and nonvested at March 31, 2021 |  | 216,342 |  |  | 4.31 |  |  |  |  |
The total grant-date fair value of CSRSUs granted during the nine months ended March 31, 2021 was $1.0 million. At March 31, 2021, there was $2.0 million of unrecognized compensation cost related to CSRSU. The unrecognized compensation cost related to CSRSU at March 31, 2021 is expected to be recognized over the weighted average period of 2.7 years. Total compensation expense for CSRSUs was $192.5 thousand and $213.1 thousand in the three and nine months ended March 31, 2021, respectively. Performance Cash Awards (“PCAs”) In November 2019, the Company granted PCAs under the 2017 Plan to certain employees. The PCAs cliff vest on the third anniversary of the date of grant based on the Company’s achievement of certain financial performance goals for the performance period July 1, 2019 through June 30, 2022, subject to certain continued employment conditions and subject to acceleration provisions of the 2017 Plan. At the end of the three-year performance period, the amount of PCAs that actually vest will be 0% to 200% of the target amount, depending on the extent to which the Company meets or exceeds the achievement of those financial performance goals measured over the full three-year performance period. The PCAs are measured initially based on a fixed amount of the awards at the date of grant and are required to be re-measured based on the probability of achieving the performance conditions at each reporting date until settlement. Compensation expense for PCAs is recognized over the applicable performance periods. The Company records a liability equal to the cost of PCAs for which achievement of the performance condition is deemed probable. As of March 31, 2021, the Company reversed the previously recognized nonvested accrued liabilities of $102.2 thousand since it was deemed not probabl e that the Company will achieve the target performance conditions. At March 31, 2021, there was no unrecognized PCA compensation cost since it was deemed not probabl e that the Company will achieve the target performance conditions. Total compensation expense for PCAs was $29.7 thousand and $46.5 thousand, respectively, for the three and nine months ended March 31, 2020.

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration