Stock Based Compensation (Text Block)

3 Months Ended

Sep. 30, 2022

Share-based Payment Arrangement [Abstract]

Share-based Payment Arrangement [Text Block]

STOCK-BASED COMPENSATION

Our operating income for the three months ended September 30, 2022 and 2021, included $6,998 and $6,071 of stock-based compensation costs, respectively.

Stock Options

On November 10, 2015, the Company adopted the 2015 Equity Incentive Plan ("2015 EIP") for its employees and non-employee directors. The plan allows for grants of stock options, stock appreciation rights, restricted stock shares or units, and performance shares or units. The maximum number of shares authorized for issuance under the plan is 3,000. For stock options, terms and vesting periods of the options are determined by the Compensation Committee of the Board of Directors when granted. The option period must expire not more than ten years from the option grant date. The options granted under this plan are exercisable beginning three years after the grant date at an exercise price equal to 100% of the fair market value of the stock at the grant date. The options terminate upon surrender of the option, ninety days after termination of employment, upon the expiration of one year following notification of a deceased optionee, or ten years after grant.

A summary of option plan activity under this plan is as follows:

	Number of Shares	Weighted Average Exercise Price		Aggregate  Intrinsic  Value
Outstanding July 1, 2022	12	$	87.27
Granted	—	—
Forfeited	—	—
Exercised	—	—
Outstanding September 30, 2022	12	$	87.27	$	1,084
Vested and Expected to Vest September 30, 2022	12	$	87.27	$	1,084
Exercisable September 30, 2022	12	$	87.27	$	1,084

At September 30, 2022, there was no compensation cost yet to be recognized related to outstanding options. For options currently exercisable, the weighted average remaining contractual term (remaining period of exercisability) as of September 30, 2022, was 3.75 years.

Restricted Stock Unit Awards

The Company issues unit awards under the 2015 EIP. The following table summarizes non-vested restricted stock unit awards as of September 30, 2022:

Unit awards	Units	Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
Outstanding July 1, 2022	303	$	166.50
Granted	112	223.96
Vested	(20)	170.87
Forfeited	(4)	173.71
Outstanding September 30, 2022	391	$	182.68	$	71,376

The 112 unit awards granted in the first quarter of fiscal 2023 had service requirements and performance measures, with 70 only having service requirements. The unit awards with only service requirements were valued at the weighted average fair value of the non-vested units based on the fair market value of the Company’s equity shares on the grant date, less the present value of expected future dividends to be declared during the vesting period, consistent with the methodology for calculating compensation expense on such awards.

The remaining 42 unit awards granted in the first quarter of fiscal 2023 have performance measures along with service requirements. 17 of these performance and service requirement unit awards were valued at grant by estimating 100% payout at release and using the fair market value of the Company equity shares on the grant date, less the present value of expected future dividends to be declared during the vesting period. The payout at release of approximately half of these unit awards will be determined based on the Company's compound annual growth rate for revenue (excluding adjustments) for the three-year vesting period compared against goal thresholds as defined in the award agreement. The performance payout at release of the other half of these unit awards will be determined based on the expansion of the Company's non-GAAP operating margin over the three-year vesting period compared against goal thresholds as defined in the award agreement. The other 25 performance and service requirement unit awards were valued at grant using a Monte Carlo pricing model as of the measurement date customized to the specific provisions of the Company’s plan design. Per the Company's award vesting and settlement provisions, the awards that utilize a Monte Carlo pricing model were valued at grant on the basis of Total Shareholder Return ("TSR") in comparison to the compensation peer group made up of participants approved by the Compensation Committee of the Company's Board of Directors for fiscal year 2023. The Monte Carlo inputs used in the model to estimate fair value at the measurement date and resulting values for these performance unit awards are as follows.

Monte Carlo award inputs:	Fiscal 2023
Compensation Peer Group:
Volatility	29.4	%
Risk free interest rate	2.96	%
Annual dividend based on most recent quarterly dividend	$1.96
Dividend yield	0.94	%
Beginning average percentile rank for TSR	71.0	%

At September 30, 2022, there was $37,428 of compensation expense, excluding forfeitures, that has yet to be recognized related to non-vested restricted stock unit awards, which will be recognized over a weighted average period of 1.25 years.