Under the CFSB Bancorp, Inc. 2023 Equity Incentive Plan (the "2023 Equity Plan"), the Company may grant options, restricted stock, restricted stock units or performance awards to its directors, officers and employees. Both incentive stock options and nonqualified stock options may be granted under the 2023 Equity Plan with 319,560 shares initially reserved for options. Any options forfeited because vesting requirements are not met or expired will become available for re-issuance under the 2023 Equity Plan. The exercise price of each option equals the market price of the Company's stock on the date of the grant and the maximum term of each option is 10 years. The total number of shares initially reserved for restricted stock is 127,824. Options and awards generally vest ratably over three to five years. The fair value of shares awarded is based on the market price at the date of grant.

The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model with the following assumptions:

During the year ended June 30, 2023, the Company made the following grants of options to purchase shares of common stock and used the following assumptions in measuring the fair value of such grants:


	For the Year Ended
	June 30, 2023
Options granted	$	273,000
Vesting period (years)		5
Expiration period (years)		10
Expected volatility		29.3	%
Expected life (years)		6.5
Expected dividend yield		0	%
Risk free interest rate		3.7	%
Option fair value	$3.17

There were no grants of options to purchase common stock during the year ended June 30, 2022.

A summary of stock option activity for the year ended June 30, 2023 is presented in the table below:


	Stock Option Grants		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Balance at July 1, 2022
Granted		273,000	$	8.33		9.95
Exercised		-		-		-
Forfeited		-		-		-
Balance at June 30, 2023		273,000	$	8.33		9.70	$	-
Exercisable at June 30, 2023		-	$	-		-	$	-
Unrecognized compensation cost	$	812,000
Weighted average remaining recognition period (years)		4.70

For the year ended June 30, 2023, stock-based compensation expense applicable to stock options was $52,000. There was no stock-based compensation expense applicable to stock-options for the year ended June 30, 2022. There were no tax benefits related to stock-based compensation expense applicable to stock-options for the years ended June 30, 2023 and 2022, respectively.

Shares issued may be either authorized but unissued shares or reacquired shares held by the Company. Any shares forfeited because vesting requirements are not met will become available for reissuance under the 2023 Equity Plan. The fair market value of shares awarded, based on the market price at the date of grant, is amortized over the applicable vesting period. Restricted stock awarded to date has been at no cost to the awardee. The following table presents activity in restricted stock awards under the 2023 Equity Plan for the year ended June 30, 2023:


	Restricted Stock Awards		Weighted Average Grant Price
Restricted stock awards at July 1, 2022
Granted		111,000	$	8.35
Vested		-		-
Forfeited		-		-
Restricted stock awards at June 30, 2023		111,000	$	8.35
Unrecognized compensation cost	$	870,000
Weighted average remaining recognition period (years)		4.70

For the year ended June 30, 2023, stock-based compensation related to restricted stock was $57,000. There was no stock-based compensation applicable to restricted stock for the year ended June 30, 2022. There were no tax benefits related to stock-based compensation expense applicable to restricted stock for the years ended June 30, 2023 and 2022, respectively.