6. Stock-Based Compensation Plans

At June 30, 2018, the Company had outstanding equity-linked grants under eight stock-based compensation plans (the “Plans”), as follows: 

The compensation cost that has been charged against income for these plans was $1,728,491, $1,086,139 and $1,629,644 for the fiscal years ended June 30, 2018, 2017 and 2016, respectively, and is recorded in the department associated with the employee to which the grants are issued. The expense for fiscal 2018 included a reversal of stock compensation from prior periods due to forfeitures of unvested options of $625,202. As of June 30, 2018, there was $4,617,767 of total unrecognized compensation cost related to non-vested share-based compensation arrangements to be recognized over a weighted-average period of 2.4 years, which includes $2,248,649 of unrecognized compensation expense on restricted stock awards.

Stock options typically expire 10 years from the date of grant and vest over service periods, which typically are 4 years. All options are granted at the price of the Common Stock on the NASDAQ Stock Market on the date of grant as set forth in the Plans.

The fair value of each option award was estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table. The expected volatility represents the historical price changes of the Company’s stock over a period equal to that of the expected term of the option. The Company uses the simplified method for determining the option term. The risk-free rate was based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield is based upon historical and projected dividends. The Company has historically not paid dividends, and is not expected to do so in the near term.

The weighted average fair value at date of grant for options granted during the fiscal years ended June 30, 2018, 2017 and 2016 was $5.50, $4.46 and $4.68 per share, respectively. The fair value was estimated based on the weighted average assumptions of:

A summary of option activity under the Plans as of June 30, 2018, 2017 and 2016, and changes during the years ended on those dates is presented below:

The total fair value of shares vested during the year ended June 30, 2018 was $1,553,905. The number and weighted-average grant-date fair value of non-vested stock options at the beginning of fiscal 2018 was 673,875 and $4.77, respectively. The number and weighted-average grant-date fair value of stock options which vested during fiscal 2018 was 648,777 and $5.08, respectively.

Stock options are granted with exercise prices not less than the fair market value of the Company’s Common Stock, at the time of the grant, with an exercise term as determined by the compensation committee of the Company’s board of directors (the “Committee”) not to exceed 10 years. The Committee determines the vesting period for the Company’s stock options. Generally, such stock options have vesting periods of immediate to four years. Certain option awards provide for accelerated vesting upon meeting specific retirement, death or disability criteria, and upon change of control.

Restricted Stock Awards

On December 15, 2016, the Company issued 400,000 shares of restricted stock to its Chief Executive Officer. These awards vest over a period of up to five years, subject to meeting certain service, performance and market conditions. These awards were valued at approximately $3.4 million and compensation expense recorded for the year ended June 30, 2018 was $900,337. At June 30, 2018, there was $2,248,649 of unrecognized compensation cost to non-vested restricted stock awards to be recognized over a weighted-average period of 2.8 years. The awards contain a combination of vesting terms which include time vesting, performance vesting relating to revenue achievement, and market vesting related to obtaining certain levels of Company stock prices. At June 30, 2018, the Company has estimated that it is probable that the performance conditions will be met. The awards were valued using a Monte Carlo valuation model using a stock price at the date of grant of $9.60, a term of 3 to 5 years, a risk free interest rate of 1.6% to 2.1% and a volatility factor of 66.5%.