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 the fair value as of grant date 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. Stock-based compensation is included in selling, general and administrative, and restructuring expenses on the consolidated statements of income. The stock-based compensation expense included in restructuring expense were for retention RSUs in connection with the Company’s restructuring plan. Forfeitures are recognized as incurred.

Total stock-based compensation expense was $4.6 million, $3.2 million and $1.0 million for fiscal years 2024, 2023, and 2022, respectively.

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

The 2022 Plan replaces the Long-Term Incentive Compensation Plan (“LTIP”) and the 2013 Omnibus Stock Plan (collectively, the “Prior Plans”) and 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 provides 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 provides for the granting of incentive and nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights and performance units. No further stock units will be granted under this plan.

The table below sets forth, as of June 30, 2024, the number of unvested PSUs granted at the target performance level for the 2022-2024, 2023-2025, and 2024-2026 performance periods under the LTIP and the number of unvested RSUs granted in conjunction with the PSUs:


	Time Based Vest					Performance Based Vest					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, 2022		86		$	19.53		174		$	18.87		260		$	19.09
Granted		62			19.27		91			19.27		153			19.27
Vested		(63	)		12.64		(44	)		17.23		(107	)		14.53
Forfeited		(6	)		23.02		(10	)		23.02		(16	)		23.02
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		(21	)		42.31		(75	)		12.15		(96	)		18.76
Forfeited		(27	)		20.80		(53	)		18.76		(80	)		19.45
Unvested as of June 30, 2024		97		$	17.92		182		$	22.07		279		$	20.65

Total unrecognized stock-based compensation related to the unvested PSUs at the target performance level and the related unvested RSUs was $2.0 million as of June 30, 2024, which is expected to be recognized over a period of 1.5 years.

A summary of the activity in the Company’s unvested restricted shares and unvested RSUs, not granted in conjunction with PSUs, as of June 30, 2024, is presented below:


				Weighted average
	Shares			fair value
	(in thousands)			per share
Unvested as of June 30, 2022		35		$	26.72
Granted		66			19.30
Vested		(21	)		23.58
Forfeited		(6	)		18.41
Unvested as of June 20, 2023		74		$	21.67
Granted		4			21.14
Vested		(58	)		21.71
Forfeited		(4	)		19.40
Unvested as of June 20, 2024		16		$	21.96

Total unrecognized stock-based compensation related to unvested restricted shares and unvested RSUs (not granted in conjunction with the PSUs) was $0.2 million as of June 30, 2024, which is expected to be recognized over a weighted average period of 1.6 years.

A summary of the activity of the Company’s stock option plans during the years ended June 30, 2024, 2023, and 2022, is presented below:


				Weighted
	Shares			Average
	(in thousands)			Exercise Price
Outstanding at June 30, 2022		215		$	21.50
Cancelled		(13	)		30.20
Outstanding at June 30, 2023		202		$	20.98
Exercised		(3	)		32.13
Cancelled		(19	)		27.40
Outstanding at June 30, 2024		180		$	20.01

The following table summarizes information for options outstanding at June 30, 2024:


		Options		Weighted Average
Range of		Outstanding		Remaining		Exercise
Prices		(in thousands)		Life (Years)		Price
$	9.97 - 15.14		97		5.7	$	12.64
	18.30 - 19.72		6		6.9		18.30
	21.96 - 27.57		39		4.5		22.64
	31.06 - 32.80		26		1.9		32.30
	43.09 - 47.45		12		2.3		45.33
$	9.97 - 47.45		180		4.7	$	20.01

The Company does not have any unrecognized stock-based compensation expense related to options.

During the quarter ended June 30, 2020, the Company awarded its former Chief Financial Officer/Chief Operating Officer (current Chief Executive Officer) 79,000 options outside of any Company stock plans. All 79,000 options remain outstanding as of June 30, 2024, with an exercise price of $9.97 and a remaining life of 5.8 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 former Chief Executive Officer 55,000 options outside of any Company stock plans. All 55,000 options remain outstanding as of June 30, 2024, with an exercise price of $21.96 and a remaining life of 4.5 years. There is no remaining unrecognized stock-based compensation expense related to these options.