8. 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”). The Company’s shareholders previously approved 700,000 shares to be issued under the plan. As of June 30, 2017, 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), July 1, 2015 – June 30, 2018 (2016-2018) and July 1, 2016 – June 30, 2019 (2017-2019). The Committee also selected total shareholder return as a performance goal for the executive officers 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 Committee approval and verification of results. 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 plan expenses of $0.9 million, $1.1 million and $1.1 million for fiscal years ended June 30, 2017, 2016 and 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 service periods would be $0.9 million, $1.0 million and $1.1 million, respectively.

The aggregate number of shares that could be awarded to key executives if the minimum, target or maximum performance goals are met is as follows:


(in thousands)
Performance Period	Minimum	Target		Maximum
Fiscal Year 2015 - 2017	11		28	55
Fiscal Year 2016 - 2018	9		23	45
Fiscal Year 2017 - 2019	11		27	52

(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. The Company’s shareholders previously approved 700,000 shares to be issued under the plan.

Under the plan, 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. These shares received as payment are retired upon receipt.

For fiscal years 2017, 2016 and 2015, the Company issued options for 24,317, 25,868 and 48,600 common shares at a weighted average exercise price of $47.45, $43.09 and $31.48 (the fair market value on the date of grant), respectively. The options were immediately available for exercise. For fiscal years ended June 30, 2017, 2016 and 2015, the Company recorded expense of $0.3 million, $0.2 million and $0.4 million, respectively. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants in fiscal years 2017, 2016 and 2015, respectively, under this plan; dividend yield of 1.5%, 1.6% and 2.0%; expected volatility of 30.8%, 26.0% and 29.9%; risk-free interest rate of 1.2%, 1.6% and 1.6% and an expected life of 5 years. The expected volatility and expected life are determined based on historical data. The weighted-average grant date fair value of stock options granted during fiscal years 2017, 2016 and 2015 were $11.76, $9.20 and $7.33, respectively. The cash proceeds from stock options exercised were $0.7 million, $0.1 million and $0.1 million for fiscal years ended 2017, 2016 and 2015, respectively. There was no income tax benefit related to the exercise of stock options for fiscal years ended June 30, 2017, 2016 and 2015.

Under the plan, the Company issued 6,997 and 6,208 restricted shares to non-executive directors as compensation and recorded expense of $0.4 million and $0.3 million during fiscal years ended June 30, 2017 and 2016, respectively.

At June 30, 201, 537,762 shares were available for future grants.

2006 and 2009 Stock Option Plans

The stock option plans were for key employees, officers and directors and provide 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 and no expense was recorded under these plans during the fiscal years ended June 30, 2017, 2016 and 2015.

The cash proceeds from stock options exercised were $0.4 million, $1.5 million and $1.6 million for fiscal years ended 2017, 2016 and 2015, respectively. The income tax benefit related to the exercise of stock options were $0.6 million, $1.6 million and $0.4 million for fiscal years ended 2017, 2016 and 2015, respectively.

A summary of the status of the Company’s stock option plans as of June 30, 2017, 2016 and 2015 and the changes during the years 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	(98)		20.57
Canceled	(9)		20.51
Outstanding and exercisable at June 30, 2017	187	$	27.21	$	5,039

The following table summarizes information for options outstanding and exercisable at June 30, 2017:



			Weighted Average
	Range of	Options	Remaining		Exercise
	Prices	Outstanding	Life (Years)		Price
		(in thousands)
$	6.96 - 13.90	38	2.4	$	12.13
	17.23 - 19.77	34	4.5		18.54
	20.50 - 27.57	40	6.1		25.72
	31.06 - 32.13	33	7.4		31.60
	43.09 - 47.45	42	8.7		45.52
$	6.96 - 47.45	187	5.9	$	27.21