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Stock-Based Compensation
3 Months Ended
Sep. 30, 2011
Stock-Based Compensation [Abstract] 
Stock-Based Compensation

7.       Stock-Based Compensation

Stock-based compensation expense recognized, together with the income tax benefits recognized, is as follows (in thousands):

 

 

Three Months Ended
September 30,

 

 

2011

 

2010

 

Stock-based compensation included in indirect costs and selling expenses:

 

 

Non-qualified stock option and stock settled stock appreciation right (SSAR) expense

$           606

$        1,387

Restricted stock and restricted stock unit (RSU) expense

          2,606

          3,519

 

 

 

Total stock-based compensation expense

$        3,212

$        4,906

 

 

 

Income tax benefit recognized for stock-based compensation expense

$        1,281

$        1,856

 

 

 

Under the terms of its 2006 Stock Incentive Plan (the 2006 Plan), the Company may issue, among others, non-qualified stock options, restricted stock, RSUs, SSARs, and performance awards, collectively referred to herein as equity instruments. During the periods presented all equity instrument grants were made in the form of RSUs. Other than performance-based RSUs which contain a market-based element, the fair value of RSU grants were determined based on the closing price of a share of the Company's common stock on the date of grant. The fair value of RSUs with market-based vesting features was also measured on the grant date, but was done so using a binomial lattice model.


 

Annual grants under the 2006 Plan are generally made to the Company's key employees during the first quarter of the Company's fiscal year and to members of the Company's Board of Directors during the second quarter of the Company's fiscal year. With the approval of its Chief Executive Officer, the Company also issues equity instruments to strategic new hires and to employees who have demonstrated superior performance. In September 2011, the Company made its annual grant to its key employees consisting of 721,540 Performance Restricted Stock Units (PRSUs), representing the maximum amount which could be earned. The PRSUs are subject to both performance and market conditions. No PRSUs will be earned if the Net After Tax Profit for the fiscal year ending June 30, 2012 is less than the Net After Tax Profit for the fiscal year ended June 30, 2011. The number of PRSUs earned by the grantee is dependent on the increase or decrease of the 90 calendar day average price per share of common stock of the Company for the period ended September 1, 2011 compared to the 90 calendar day average price per share of common stock of the Company for the period ending September 1, 2012. In addition to the performance and market conditions, there is a service vesting condition which stipulates that 50 percent of the award will vest on the third anniversary of the grant date and 50 percent of the award will vest on the fourth anniversary of the grant date, in both cases dependent upon continuing service by the grantee as an employee of the Company, unless the grantee is eligible for earlier vesting upon retirement, as defined.

The total number of shares authorized by shareholders for grants under the 2006 Plan is 10,950,000 as of September 30, 2011. The aggregate number of grants that may be made may exceed this approved amount as forfeited SSARs, stock options, restricted stock and RSUs, and vested but unexercised SSARs and stock options that expire, become available for future grants. As of September 30, 2011, cumulative grants of 12,229,684 equity instruments underlying the shares authorized have been awarded, and 2,476,399 of these instruments have been forfeited.

Activity related to SSARs/non-qualified stock options and RSUs/restricted shares issued under the 2006 Plan during the three months ended September 30, 2011 is as follows:

 

 

 

 

 

SSARs/

Non-qualified
Stock Options

 

RSUs/
Restricted Shares

 

Outstanding, June 30, 2011

        2,110,304

      1,322,101

Granted

                      —

         741,193

Exercised/Issued

            (34,330 )

        (232,306 )

Forfeited/Lapsed

               (6,380 )

        (183,725 )

 

 

 

Outstanding, September 30, 2011

        2,069,594

      1,647,263

 

 

 

Weighted average grant date fair value for RSUs/restricted shares

 

$           46.32

 

 

 

As of September 30, 2011, there was $2.7 million of total unrecognized compensation cost related to SSARs and stock options scheduled to be recognized over a weighted average period of 1.3 years, and $32.4 million of total unrecognized compensation cost related to restricted shares and RSUs scheduled to be recognized over a weighted-average period of 2.8 years.