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| STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock Incentive Plans The Company maintains the 2008 Plan, the 2011 Plan, the 2017 Plan and the 2025 Plan for the benefit of certain non-employee directors, officers, and key employees. Under these plans, a total of 3,750,000 shares of authorized common stock have been reserved for issuance pursuant to grants approved by the Compensation Committee. At June 30, 2026, there were a total of 669,100 shares of common stock remaining available for grant under the 2017 Plan and 2025 Plan and no shares of common stock remaining available for grant under the 2008 or 2011 plan. No awards have been granted under the 2025 Plan as of June 30, 2026. Stock options granted under these plans have a maximum term of 10 years. Service Options and Restricted Stock granted under these plans typically vest in three equal annual installments, beginning on the first anniversary of the grant date, subject to each respective employee’s continued employment at the Company through each applicable vesting date or otherwise provided under the terms of the applicable award agreement or applicable employment agreement. The performance vesting conditions associated with Performance Shares and Performance Options are further discussed below within this Note 9 to the Consolidated Financial Statements. Stock-based compensation is recognized as provided under FASB ASC Topic 718-10 and FASB ASC Topic 505-50. FASB ASC Topic 718-10 requires all share-based payments to employees, including grants of employee stock options, to be recognized as compensation expense over the requisite service period (generally the vesting period) in the consolidated financial statements based on their grant date fair values. Stock-based compensation related to restricted stock is based on the number of shares expected to vest and the fair market value of the common stock on the grant date. Stock-based compensation related to stock option awards is based on the number of shares expected to vest and the estimated fair value of the awards on the grant date using the Black-Scholes valuation model. Under the Black-Scholes valuation method, the assumptions used to determine the fair value are expected volatility, expected life, average risk-free rate, and dividend yield, if any. The expected stock price volatility is based on the historical volatility of the Company's common stock for a period approximating the expected life. The expected life represents the period of time that options are expected to be outstanding after the grant date. The risk-free rate reflects the interest rate at grant date on zero coupon U.S. governmental bonds having a remaining life similar to the expected option term. Long-term Incentive Awards and Non-Employee Director Awards On December 18, 2024, the Compensation Committee and Board of Directors approved grants of Service Options, Performance Options, Restricted Stock and Performance Shares under the 2017 Plan to certain employee directors, vice presidents, senior vice presidents, and executive officers. Separately, the Compensation Committee approved grants of Restricted Stock to non-employee directors of the Company. Up to 100% of the shares of restricted stock subject to the 2024 Performance Share awards were eligible to vest based on the achievement of certain performance goals established by the Compensation Committee related to company operational performance metrics during the 2024 Performance Share Measurement Period, for which achievement must be certified by the Compensation Committee. The 2024 Performance Shares were eligible to vest over the 2024 Performance Share Measurement Period, subject to each respective employee’s continued employment at the Company through the last day of the 2024 Performance Share Measurement Period or as otherwise provided under the terms of the applicable award agreement or applicable employment agreement. On December 31, 2025, 1,031 of the 7,500 2024 Performance Share awards were forfeited as a result of certain company operational performance metrics not being achieved during the 2024 Performance Share Measurement Period. The remaining 6,469 performance shares vested on January 21, 2026 after certification of performance achievement by the Compensation Committee. Up to 100% of the 2024 Performance Options were eligible to vest based on the achievement of certain performance goals established by the Compensation Committee related to company operational performance metrics during the 2024 Performance Option Measurement Period, for which achievement must be certified by the Compensation Committee. Following certification of achievement, the 2024 Performance Options mainly vest in three equal annual installments, beginning on January 30, 2026, subject to each respective employee’s continued employment at the Company through each applicable vesting date or as otherwise provided under the terms of the applicable award agreement or applicable employment agreement. On December 31, 2025, 6,132 of 23,500 2024 Performance Options were forfeited as a result of certain company operational performance metrics not being achieved during the 2024 Performance Share Measurement Period. The achievement of the remaining 17,368 performance options was certified by the Compensation Committee on January 21, 2026, and began vesting on January 30, 2026 as described above. On June 10, 2025, the Compensation Committee and Board of Directors approved grants of Restricted Stock and Performance Shares under the 2017 Plan to certain vice presidents, senior vice presidents, and executive officers. Separately, the Compensation Committee approved grants of Restricted Stock to non-employee directors of the Company. Up to 100% of the shares of restricted stock subject to the 2025 Performance Share awards will vest, if at all, based on the achievement of a trailing EPS performance target established by the Compensation Committee that is based on EPS for the previous four calendar quarters. The 2025 Performance Shares are eligible to vest over the 2025 Performance Share Measurement Period, subject to each respective employee’s continued employment at the Company through the last day of the 2025 Performance Share Measurement Period (or as otherwise provided under the terms of the applicable award agreement or applicable employment agreement). The 2025 Performance Shares performance target is set forth below.
On April 15, 2026, the Compensation Committee and Board of Directors approved grants of Service Options, Performance Options, Restricted Stock and Performance Shares under the 2017 Plan to certain employee directors and vice presidents. Up to 100% of the 2026 Performance Options are eligible to vest based on the achievement of certain performance goals established by the Compensation Committee related to company operational performance metrics during the 2026 Performance Share and Option Measurement Period, for which achievement must be certified by the Compensation Committee. Following certification of achievement, the 2026 Performance Options vest in three equal annual installments, beginning in April 2027, subject to each respective employee’s continued employment at the Company through each applicable vesting date or otherwise provided under the terms of the applicable award agreement or applicable employment agreement. The 2026 Performance Shares are eligible to vest based on the achievement of certain performance goals established by the Compensation Committee related to company operational performance metrics during the 2026 Performance Share and Option Measurement Period, for which achievement must be certified by the Compensation Committee. Following certification of achievement, the 2026 Performance Shares vest in April 2027, subject to each respective employee’s continued employment at the Company through each applicable vesting date or otherwise provided under the terms of the applicable award agreement or applicable employment agreement. Stock Options The weighted-average fair value at the grant date for options issued during the three months ended June 30, 2026 was $69.27. Fair value was estimated at grant date using the weighted-average assumptions listed below:
Option activity for the three months ended June 30, 2026 was as follows:
The aggregate intrinsic value reflected in the table above represents the total pre-tax intrinsic value (the difference between the closing stock price on June 30, 2026 and the exercise price, multiplied by the number of in-the-money options that are currently exercisable) that would have been received by option holders had all option holders exercised their options as of June 30, 2026. This amount will change as the market price of the common stock changes. The total intrinsic value and tax benefit of options exercised during the three month periods ended June 30, 2026 and 2025 were as follows:
No stock options vested during the three months ended June 30, 2026. As of June 30, 2026, total unrecognized stock-based compensation expense related to non-vested stock options amounted to approximately $2.0 million, which is expected to be recognized over a weighted-average period of approximately 2.0 years. Restricted Stock and Performance Shares During the first three months of fiscal 2027, the Company granted 10,845 shares of restricted stock (which are equity classified) to certain vice presidents and our former interim CEO with a grant date weighted average fair value of $138.74 per share. The total fair value of restricted stock vested during the three months ended June 30, 2026 was $4.3 million. As of June 30, 2026, there was approximately $9.8 million of unrecognized compensation cost related to unvested restricted stock awards, which is expected to be recognized over the next 1.3 years based on current estimates. A summary of the status of the Company’s restricted stock as of June 30, 2026, and changes during the three months ended June 30, 2026, are presented below: 3 Of the 137,095 options outstanding, 19,398 are not yet exercisable based solely on fulfilling a service condition and another 35,314 are not yet exercisable based solely on fulfilling performance conditions.
Total Stock-Based Compensation Total stock-based compensation included as a component of personnel expenses in the Company's Consolidated Statements of Operations during the three month periods ended June 30, 2026 and 2025 was as follows:
5 Reflects the forfeiture of 8,000 unvested performance shares by the former CEO and 6,503 unvested time-based restricted shares by the former interim CEO in connection with their termination of employment in April 2026 and June 2026, respectively.
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