Note 10 - Deferred Compensation

12 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Retirement Benefits [Text Block]

10. DEFERRED COMPENSATION

The Company has deferred compensation agreements with a former and current officer. The related expense is calculated using the net present value of the expected payments and is included in selling, general and administrative expenses in the Consolidated Statements of Operations. The Company's current and non-current deferred compensation obligations are included in accrued liabilities and deferred compensation, respectively, in the Consolidated Balance Sheets. The net present value was calculated for the former officer using a discount factor of 

1.00%

 as of 

June 30,

2020

and 

2.60%

 as of

June 30, 

2019

. The net present value was calculated for the current officer using a discount factor of  

3.10%

 at 

June 30,

2020

and 

4.80%

 as of

June 30, 

2019

.

The Board of Directors entered into an agreement to continue the

1991

base salary of the former chairman for the remainder of his life.  These payments began in the fiscal year ended

June 30, 2015,

and payments of 

$150,000

 were made under this arrangement for the years ended 

June 30,

2020

and

2019

.  The Company has a deferred compensation liability of 

$416,883

 and 

$540,379

 recorded as of 

June 30,

2020

and

2019

, respectively.  Deferred compensation expense of 

$26,504

 and 

$17,495

 was recognized under this arrangement in

2020

and

2019

, respectively.

The Board of Directors has approved a supplemental retirement plan for an officer that calls for annual cash compensation following retirement from the Company in an amount equal to

2%

of base salary, as defined in the agreement, multiplied by the number of years of service to the Company.  The retirement payments are to be paid monthly to the officer until his death and then to his surviving spouse monthly until her death.  The Company has a deferred compensation liability of 

$2,066,599

 and 

$2,029,583

 recorded as of 

June 30,

2020

and

2019

, respectively.  Deferred compensation expense of 

$37,016

 and 

$158,458

 was recognized under this arrangement in

2020

and

2019

, respectively.  The current officer's retirement date is assumed to be

October

2029

, which is

3

years later than previously assumed.