STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2022

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

9. STOCK-BASED COMPENSATION

In November 2015, our stockholders approved the 2015 Omnibus Long-Term Incentive Plan (“2015 LTIP”). Under the 2015 LTIP, 2,500,000 shares of common stock have been authorized for future grants to officers, directors, key employees and other persons. The 2015 LTIP provides for the grant of stock options, unrestricted stock, restricted stock, dividend equivalent rights, SSARs and cash awards. Any of these awards may, but need not, be made as performance incentives. Stock options granted under the 2015 LTIP may be non-qualified stock options or incentive stock options.

We recognized stock-based compensation expense as follows (amounts in thousands):

	Year Ended		Six Months Ended		Fiscal Years Ended
	December 31,		December 31,		June 30,		June 30,
	2022		2021		2021		2020
Restricted stock	$	4,515	$	2,006	$	2,668	$	5,117
Performance stock		2,685		405		1,317		1,291
Stock appreciation rights		1,179		779		1,677		2,545
Stock options		32		28		68		163
Total stock-based compensation expense	$	8,411	$	3,218	$	5,730	$	9,116

Stock-based compensation expense is included within General and administrative expense on the consolidated statements of operations and comprehensive income.

Stock Options and Stock Appreciation Rights

Stock option and SSARs awards are granted with an exercise price equal to the closing market price of our stock at the date of grant. Stock option and SSARs awards granted to officers, key employees and other persons vest based on one to three years of continuous service. Stock option and SSARs awards have 10-year contractual terms. There were no stock options or SSARs awards granted during the year ended December 31, 2022 or the six months ended December 31, 2021.

To determine stock-based compensation expense for stock options and SSARs, the fair value of each stock option and SSAR is estimated on the date of grant using the Black-Scholes-Merton (“Black-Scholes”) option pricing model for all periods presented. The Black-Scholes model requires key assumptions to determine fair value. Those key assumptions for the fiscal years June 30, 2021, and 2020 grants are noted in the following table:

	Stock Options
	Year Ended		Six Months Ended		Fiscal Years Ended
	December 31,		December 31,		June 30,		June 30,
	2022		2021		2021		2020
Weighted-average expected volatility	—	%	—	%	39.4	%	34.4	%
Weighted-average expected life in years	—		—		4.4		4.5
Weighted-average dividend yield	—	%	—	%	0.9	%	1.0	%
Weighted-average risk free interest rate	—	%	—	%	0.2	%	1.6	%

	SSARs
	Year Ended		Six Months Ended		Fiscal Years Ended
	December 31,		December 31,		June 30,		June 30,
	2022		2021		2021		2020
Weighted-average expected volatility	—	%	—	%	39.2	%	34.6	%
Weighted-average expected life in years	—		—		4.2		4.7
Weighted-average dividend yield	—	%	—	%	0.9	%	1.0	%
Weighted-average risk free interest rate	—	%	—	%	0.2	%	1.6	%

Our expected volatility is based on the historical volatility of our stock over the expected option term. Our expected option term is determined by historical exercise patterns along with other known employee or company information at the time of grant. The risk-free interest rate is based on the zero-coupon U.S. Treasury bond at the time of grant with a term approximate to the expected option term.

Stock Options

A summary of stock option activity for the year ended December 31, 2022, is presented below.

				Weighted-
		Weighted-		Average
		Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic Value
	Shares	Price		Life (Years)	(in thousands)
Outstanding at January 1, 2022	21,761	$	79.51
Granted	—	$	—
Forfeited	(476)	$	139.84
Exercised	(3,407)	$	62.38
Outstanding at December 31, 2022	17,878	$	79.51	4.1	$	632
Exercisable at December 31, 2022	17,164	$	78.73	4.0	$	632

There were no stock options granted during the year ended December 31, 2022 or the six months ended December 31, 2021. The weighted-average grant date fair value of options granted during the fiscal years ended June 30, 2021 and 2020, was $41.92 and $17.42, respectively. The total intrinsic value of options exercised during the years ended December 31, 2022 and June 30, 2020 was $0.2 million and $1.3 million, respectively. There were no options exercised during the six months ended December 31, 2021 or fiscal year ended June 30, 2021.

As of December 31, 2022, there was no unrecognized stock-based compensation expense related to unvested stock options.

SSARs

A summary of SSARs activity for the year ended December 31, 2022, is presented below:

				Weighted-
		Weighted-		Average
		Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic Value
	Shares	Price		Life (Years)	(in thousands)
Outstanding at January 1, 2022	184,137	$	111.15
Granted	—	$	—
Forfeited	(2,110)	$	139.84
Exercised	(7,121)	$	90.41
Outstanding at December 31, 2022	174,906	$	111.65	6.2	$	2,396
Exercisable at December 31, 2022	154,602	$	107.95	6.0	$	2,396

There were no SSARs granted during the year ended December 31, 2022 and six months ended December 31, 2021. The weighted-average grant date fair value of SSARs granted during the fiscal years ended June 30, 2021 and 2020 was $40.92 and $32.33. The total intrinsic value of SSARs exercised during the years ended December 31, 2022, June 30, 2021 and 2020 was $0.2 million, $0.1 million and $4.6 million, respectively. There were no SSARs exercised during the six months ended December 31, 2021.

As of December 31, 2022, there was approximately $0.5 million of total unrecognized stock-based compensation expense related to unvested SSARs, which is expected to be recognized over a weighted-average period of 0.6 years.

Other Stock-based Compensation

Performance Shares

During the year ended December 31, 2022 and six months ended December 31, 2021, officers and certain employees were granted shares of restricted common stock that may vest based on our total shareholder return (“TSR”) compared to the TSRs of certain defined members of the Van Eck Vectors Gold Miners ETF (“GDX”) (“Granted TSRs”). The Granted TSRs may vest by linear interpolation in a range between zero shares if neither threshold TSR metric is met; to 100% of the Granted TSRs awarded if the target TSR metric is met; to 200% of Granted TSRs awarded if the maximum TSR metric is met. The Granted TSRs will expire in three years from the date of grant if the TSR market condition is met and a three year service condition is met.

During the fiscal years ended June 30, 2021 and 2020, officers and certain employees were granted shares of restricted common stock that can only be earned upon the achievement of certain pre-defined performance measures. Specifically, for performance shares granted during the fiscal years ended June 30, 2021 and 2020, one-half of the shares awarded may vest upon our achievement of annual growth in Net Gold Equivalent Ounces (“Net GEOs”) (“GEO Shares”). The second one-half of performance shares granted during the fiscal years ended June 30, 2021 and 2020 may vest based on our TSR compared to the TSRs of all members of the GDX (“Prior TSR Shares”). GEO Shares and Prior TSR Shares may vest by linear interpolation in a range between zero shares if neither threshold Net GEO and TSR metric is met; to 100% of GEO Shares and Prior TSR Shares awarded if both target Net GEO and TSR metrics are met; to 200% of the Net GEO and Prior TSR Shares awarded if both the maximum Net GEO and TSR metrics are met. The GEO Shares will expire in five years from the date of grant if the performance measure is not met, while the Prior TSR Shares will expire in three years from the date of grant if the TSR market condition and three year service condition are not met.

We measured the fair value of the GEO Shares based upon the market price of our common stock as of the date of grant. The measurement date for the GEO Shares will be determined at such time that the performance goals are attained or that it is probable they will be attained. At such time that it is probable that a performance condition will be achieved, compensation expense will be measured by the number of shares that will ultimately be earned based on the grant date market price of our common stock. For shares that were previously estimated to be probable of vesting and are no longer deemed to be probable of vesting, compensation expense is reversed during the period in which it is determined they are no longer probable of vesting. Interim recognition of compensation expense will be made at such time as management can reasonably estimate the number of shares that will be earned. GEO Shares granted in August 2020, 2019 and 2018 remain outstanding as of December 31, 2022 and the Company will continue to measure these awards for vesting until each awards expiration or performance attainment, whichever date is first.  

We measured the grant date fair value of the Granted TSRs and Prior TSR Shares using a Monte Carlo valuation model. The fair value of our TSR awards is multiplied by the target number (100%) of TSR awards granted to determine total stock-based compensation expense. Total stock-based compensation expense of the TSR awards is amortized on a straight-line basis over the requisite service period, or three years. Stock-based compensation expense for the TSR awards is recognized provided the requisite service period is rendered, regardless of when, if ever, the TSR market condition is satisfied. We will reverse previously recognized stock-based compensation expense attributable to the TSR awards only if the requisite service period is not met.

A summary of the status of our unvested Performance Shares at maximum (200%) attainment for the year ended December 31, 2022, is presented below:

		Weighted-
		Average
	Number of	Grant Date
	Shares	Fair Value
Outstanding at January 1, 2022	167,378	$	108.75
Granted	39,380	$	148.89
Forfeited	(6,480)	$	118.62
Vested	(6,830)	$	107.77
Non-attainment	(27,007)	$	83.16
Outstanding at December 31, 2022	166,441	$	122.05

As of December 31, 2022, total unrecognized stock-based compensation expense related to Performance Shares was approximately $4.7 million, which is expected to be recognized over the average remaining vesting period of 1.8 years.

Restricted Stock

Officers, non-executive directors and certain employees may be granted shares of restricted stock that vest on continued service alone (“Restricted Stock”). During the year ended December 31, 2022, officers and certain employees were granted 24,090 shares of Restricted Stock. Restricted Stock granted to officers and certain employees during the year ended December 31, 2022, and six months ended December 31, 2021, vest ratably over three years from the date of grant, while Restricted Stock granted to officers and certain employees during the fiscal years ended June 30, 2021 and 2020 vest over three years beginning after a two-year holding period from the date of grant with one-third of the shares vesting in years three, four and five, respectively. Also, our non-executive directors were granted 4,128 shares of Restricted Stock during the year ended December 31, 2022. The non-executive directors’ shares of Restricted Stock vest 50% immediately and 50% one year after the date of grant.

We measure the fair value of the Restricted Stock based upon the market price of our common stock as of the date of grant. Restricted Stock is amortized over the applicable vesting period using the straight-line method. Unvested shares of Restricted Stock are subject to forfeiture upon termination of employment or service.

A summary of the status of our unvested Restricted Stock for the year ended December 31, 2022, is presented below:

		Weighted-
		Average
	Number of	Grant Date
	Shares	Fair Value
Outstanding at January 1, 2022	128,058	$	111.03
Granted	28,218	$	126.69
Forfeited	(3,270)	$	121.06
Vested	(32,464)	$	102.38
Outstanding at December 31, 2022	120,542	$	116.76

As of December 31, 2022, total unrecognized stock-based compensation expense related to Restricted Stock was approximately $6.5 million, which is expected to be recognized over the weighted-average vesting period of 2.0 years.