The Company accounts for its stock-based compensation plans in accordance with ASC 718, Stock Compensation, which requires the Company to measure all share-based payments at grant date fair value and recognize the cost over the requisite service period. Restricted shares and restricted stock units (“RSUs”) generally vest over 1 to 3 years. Stock options are granted at an exercise price equal to the fair value of the Company’s common stock price at the grant date and are exercisable for up to 10 years upon vesting. Stock-based compensation is included in selling, general and administrative expenses on the Consolidated Statements of Income and Comprehensive Income. Forfeitures are recognized as incurred.

The following table is a summary of total stock-based compensation expenses for the three and six months ended December 31, 2023 and 2022.


	Three Months Ended				Six Months Ended
	December 31,				December 31,
(in thousands)	2023		2022		2023		2022
Total stock-based compensation expense	$	934	$	845	$	1,845	$	1,670

On December 14, 2022, the Company’s shareholders approved the Flexsteel Industries, Inc. 2022 Equity Incentive Plan (“2022 Plan”).

The 2022 Plan replaced the Long-Term Incentive Compensation Plan (“LTIP”) and the 2013 Omnibus Stock Plan (collectively, the “Prior Plans”). No further awards will be made under either of the Prior Plans, but these Prior Plans will continue to govern awards previously granted under them.

The 2022 Plan is a long-term incentive plan pursuant to which awards may be granted to certain employees, independent contractors and directors of the Company, in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares or other stock-based awards. For periods beginning on or after July 1, 2023, restricted stock units ("RSUs") and performance stock units ("PSUs") granted to officers and key employees as part of long-term compensation programs are issued from the 2022 Plan. RSUs and PSUs awarded from the 2022 Plan are included in the Long-Term Incentive Compensation or Restricted Share and RSUs tables below.

The LTIP provided for PSUs to be awarded to officers and key employees based on performance goals set by the Compensation Committee of the Board of Directors (the “Committee”). In conjunction with each grant of PSUs, the Committee granted RSUs under the 2013 Omnibus Stock Plan that vested at the end of three years. No further awards will be issued under this plan.

The 2013 Omnibus Stock Plan was for key employees, officers and directors and provided for the granting of incentive and nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights, and performance units. No further awards will be issued under this plan.

The table below sets forth, as of December 31, 2023, the number of unvested PSUs granted at the target performance level for the 2022-2024, 2023-2025, and 2024-2026 performance periods under the 2022 Plan and LTIP (as applicable) and the number of unvested RSUs granted in conjunction with the PSUs. For PSUs awarded for the three year performance period ending June 30, 2024 participants may earn the award based on a cumulative three year performance goal. For PSUs awarded for the three year performance periods ending June 30, 2025 and 2026, participants may earn one-third of the award in each of the three years based on meeting performance goals for


	Time-Based Vest (RSUs)					Performance-Based Vest (PSUs)					Total
				Weighted Average					Weighted Average					Weighted Average
				Fair Value					Fair Value					Fair Value
(shares in thousands)	Shares			Per Share		Shares			Per Share		Shares			Per Share
Unvested as of June 30, 2023		79		$	24.56		211		$	19.19		290		$	20.65
Granted		66			18.91		99			18.91		165			18.91
Vested		—			—		(75	)		12.15		(75	)		12.15
Forfeited		(1	)		21.59		(19	)		14.80		(20	)		15.14
Unvested as of December 31, 2023		144		$	21.99		216		$	21.89		360		$	21.93

Total unrecognized stock-based compensation related to the unvested PSUs at the target performance level and the related unvested RSUs was $3.8 million as of December 31, 2023, which is expected to be recognized over a weighted-average period of 1.8 years.

A summary of the activity in the Company’s unvested restricted shares and unvested RSUs (not granted in conjunction with PSUs) during the three and six months ended December 31, 2023, is as follows:


				Weighted Average
	Shares			Fair Value
	(in thousands)			Per Share
Unvested as of June 30, 2023		74		$	21.67
Granted		4			20.06
Vested		(8	)		28.66
Unvested as of December 31, 2023		70		$	20.78

Total unrecognized stock-based compensation related to unvested restricted shares and unvested RSUs (not granted in conjunction with the PSUs) was $0.5 million as of December 31, 2023, which is expected to be recognized over a weighted-average period of 0.9 year.

A summary of the activity of the Company’s stock option plans as of December 31, 2023, is presented below:


				Weighted
	Shares			Average
	(in thousands)			Exercise Price
Outstanding at June 30, 2023		202		$	20.98
Canceled		(18	)		27.40
Outstanding at December 31, 2023		184		$	20.34

The following table summarizes information for options outstanding at December 31, 2023:


		Options		Weighted Average
Range of		Outstanding		Remaining		Exercise
Prices		(in thousands)		Life (Years)		Price
$	9.97 - 15.14		97		6.2	$	12.64
	18.30 - 19.72		6		7.4		18.30
	21.96 - 27.57		39		5.0		22.64
	31.06 - 32.80		29		2.3		32.27
	43.09 - 47.45		13		2.7		45.28
$	9.97 - 47.45		184		5.1	$	20.34

There is no unrecognized stock-based compensation expense related to these options as of December 31, 2023.

During the quarter ended June 30, 2020, the Company awarded its Chief Financial Officer/Chief Operating Officer 79,000 options outside of any Company stock plans. All 79,000 options remain outstanding as of December 31, 2023, with an exercise price of $9.97 and a remaining life of 6.3 years. There is no remaining unrecognized stock-based compensation expense related to these options.

During the quarter ended December 31, 2018, the Company awarded its Chief Executive Officer 55,000 options outside of any Company stock plans. All 55,000 options remain outstanding as of December 31, 2023, with an exercise price of $21.96 and a remaining life of 5.0 years. There is no remaining unrecognized stock-based compensation expense related to these options.