STOCK-BASED COMPENSATION

The Company has two stock-based compensation methods available when determining employee compensation.

(1)Long-Term Incentive Compensation Plans

Long-Term Incentive Compensation Plan

The long-term incentive compensation plan provides for shares of common stock to be awarded to officers and key employees based on performance targets set by the Compensation Committee of the Board of Directors (the “Committee”). In December 2013, the Company’s shareholders approved 700,000 shares to be issued under the plan. As of September 30, 2016, 61,969 shares have been issued. The committee selected fully-diluted earnings per share as the performance goal for the three-year performance periods July 1, 2014 – June 30, 2017 (2015-2017) and July 1, 2015 – June 30, 2018 (2016-2018). The Committee selected fully-diluted earnings per share and total shareholder return as the performance goals for the three-year performance period July 1, 2016 – June 30, 2019 (2017-2019). Stock awards will be issued to participants as soon as practicable following the end of the performance periods subject to verification of results and Committee approval. The compensation cost related to the number of shares to be granted under each performance period is fixed on the grant date, which is the date the performance period begins.

The Company recorded expense of $0.2 million and $0.3 million for the quarters ended September 30, 2016 and September 30, 2015, respectively. If the target performance goals for 2015-2017, 2016-2018 and 2017-2019 would be achieved, the total amount of compensation cost recognized over the requisite performance periods would be $1.0 million, $1.0 million and $1.1 million, respectively.

(2)Stock Plans

Omnibus Stock Plan

The Omnibus Stock Plan is for key employees, officers and directors and provides for the granting of incentive and nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights and performance units. In December 2013, the Company’s shareholders approved 700,000 shares to be issued under the plan.

Under the plans, options were granted at an exercise price equal to the fair market value of the underlying common stock at the date of grant and exercisable for up to 10 years. All options were exercisable when granted. It is the Company’s policy to issue new shares upon exercise of stock options. The Company accepts shares of the Company’s common stock as payment for the exercise price of options. Shares received as payment are retired upon receipt. During the quarter ended September 30, 2016 and September 30, 2015, $0.3 million and $0.2 million were expensed related to this plan, respectively.

The Company issued 1,778 shares to non-executive directors as compensation and recorded expense of $0.1 million during the quarter ended September 30, 2016. No shares were issued to directors during the quarter ended September 30, 2015.

At September 30, 2016, 541,307 shares were available for future grants.

2002, 2006 and 2009 Stock Option Plans

The stock option plans were for key employees, officers and directors and provided for granting incentive and nonqualified stock options. Under the plans, options were granted at an exercise price equal to the fair market value of the underlying common stock at the date of grant and exercisable for up to 10 years. All options were exercisable when granted. No additional options can be granted under the 2002, 2006 and 2009 stock option plans.

A summary of the status of the Company’s stock plans as of June 30, 2015 and June 30, 2016, and September 30, 2016 and the changes during the periods then ended is presented below:



					Aggregate
	Shares		Weighted Average		Intrinsic Value
	(in thousands)		Exercise Price		(in thousands)
Outstanding and exercisable at June 30, 2015	457		17.02	$	11,916
Granted	26		43.09
Exercised	(207)		12.68
Canceled	(6)		22.32
Outstanding and exercisable at June 30, 2016	270		22.85	$	4,638
Granted	24		47.45
Exercised	(46)		21.93
Canceled	(1)		43.09
Outstanding and exercisable at September 30, 2016	247	$	25.25	$	6,546

The following table summarizes information for options outstanding and exercisable at September 30, 2016:



			Weighted Average
	Range of	Options	Remaining		Exercise
	Prices	Outstanding	Life (Years)		Price
		(in thousands)
$	6.81 - 12.74	40	1.2	$	11.33
	13.75 - 17.23	52	4.7		15.42
	19.72 - 27.57	71	6.6		23.75
	31.06 - 47.45	84	8.8		39.23
$	6.81 - 47.45	247	6.1	$	25.25