Stock-Based Compensation

12 Months Ended

Jun. 30, 2025

Note 13.

Stock-Based Compensation

Stock Incentive Plans

On November 12, 2014, the stockholders of the Company approved the adoption of the Company’s 2014 Stock Incentive Plan (the 2014 Stock Incentive Plan) for the benefit of employees and non-employee directors as an incentive to contribute to the success of the Company and to reward employees for outstanding performance and the attainment of targeted goals. The 2014 Stock Incentive Plan covers a total of 300,000 shares (as adjusted), of which no more than 75,000 shares (as adjusted), or 25% of the plan, may be share awards. The balance of the plan is reserved for stock option awards which would total 225,000 (as adjusted) stock options assuming all the stock awards are issued. All incentive stock options granted under the 2014 Stock Incentive Plan are intended to comply with the requirements of Section 422 of the Internal Revenue Code. On January 31, 2024, the Company granted a total of 4,000 stock options to a key employee vesting ratably over three years commencing February 1, 2024. On July 24, 2024, the Company granted a total of 1,600 plan share awards and 23,000 stock options to directors, officers and key employees vesting ratably over five years. The 2014 Stock Incentive Plan cost is recognized over the five year vesting period. The 2014 Stock Incentive Plan terminated on August 13, 2024, however, the 1,600 plan share awards and 155,600 outstanding options as of June 30, 2025 will remain in effect for the remainder of their five-year vesting and original ten year terms, respectively.

On November 13, 2019, the stockholders of the Company approved the adoption of the Company’s 2019 Stock Incentive Plan (the 2019 Stock Incentive Plan, together with the 2014 Stock Incentive Plan, the “Stock Incentive Plans”) which provides for a total of 250,000 shares (as adjusted) reserved for future issuance as stock awards or stock options. No more than 62,500 (as adjusted) shares, or 25%, may be granted as stock awards. The balance of the plan is reserved for stock option awards. On November 11, 2020, the Company granted a total of 62,500 (as adjusted) plan stock awards and 187,500 (as adjusted) stock options to directors, officers and other key employees vesting ratably over five years, with the final vesting November 11, 2025. On July 24, 2024, the Company granted 1,600 stock options to a key employee vesting ratably over five years. The Stock Incentive Plans costs are recognized over the five year vesting period. As of June 30, 2025, there are 800 stock options available for future grant under the 2019 Stock Incentive Plan.

Incentive stock options and non-qualified stock options granted under the Stock Incentive Plans become vested and exercisable at a rate of 20% per year over five years commencing one year from the date of the grant with an additional 20% vesting on each successive anniversary of the date the option was granted. No vesting shall occur after an employee’s employment or service as a director is terminated. In the event of death or disability of an employee or director or change in control of the Company, the unvested options shall become vested and exercisable. The Company recognizes compensation expense during the vesting period based on the fair value of the option on the date of the grant.

Stock Awards

Following is a summary of the status of the stock awards outstanding under the Stock Incentive Plans during the fiscal years ended June 30, 2025 and 2024 (split adjusted):

	Awarded Shares
	2025			2024

Balance - Beginning of Year		25,000			37,900
Granted		1,600			-
Forfeited		-			-
Earned and Issued		(13,300	)		(12,900	)

Balance - End of Year		13,300			25,000

Compensation expense pertaining to the share awards under the Stock Incentive Plans was approximately $112,000 and $118,000 for the years ended June 30, 2025 and 2024, respectively.

Stock Options

Following is a summary of the status of the options outstanding during the fiscal years ended June 30, 2025 and 2024 (split adjusted):

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Contract		Intrinsic
	Shares			Price		Term		Value
Outstanding at June 30, 2024		319,700		$	11.83		4.30	$	115,197
Granted		24,600			11.79
Exercised		(10,000	)		11.09
Forfeited		(800	)		11.86

Outstanding at June 30, 2025		333,500		$	11.85		3.82	$	583,818

Options Exercisable at June 30, 2025		274,467		$	11.84		3.14	$	481,818


Outstanding at June 30, 2023		364,916		$	11.64		4.81	$	874,321
Granted		4,000			13.69
Exercised		(39,616	)		9.46
Forfeited		(9,600	)		15.31

Outstanding at June 30, 2024		319,700		$	11.83		4.30	$	115,197

Options Exercisable at June 30, 2024		242,834		$	11.80		3.62	$	(80,340	)

The fair value of each option granted is estimated on the grant date using the Black-Scholes model. The following assumptions were made in estimating fair value.

	2014/2019 Stock			2014 Stock			2019 Stock
	Incentive Plan			Incentive Plan			Incentive Plan
	July 24, 2024			January 31, 2024			November 11, 2020
Dividend Yield		4.41	%		3.65	%		2.78	%
Expected Term	10 years			10 years			10 years
Risk-Free Interest Rate		4.28	%		3.99	%		0.98	%
Expected Life	10 years			10 years			10 years
Expected Volatility (1)		35.51	%		36.58	%		25.56	%

(1) Weekly volatility is annualized by multiplying by the square root of 52.

A summary of the status of the Company’s nonvested options as of June 30, 2025 and changes during the year ended June 30, 2025 is as follows (split adjusted):

				Weighted
	Number of			Average
	Shares			Exercise Price
Nonvested at June 30, 2024		76,066			$	11.92
Vested		(41,633	)			11.92
Granted		24,600				11.79
Forfeited		-				-
Nonvested at June 30, 2025		59,033			$	11.87

For the years ended June 30, 2025 and 2024, compensation expense charged to operations for stock options granted under the Stock Incentive Plans was $94,000 and $69,000, respectively.