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Stock-Based Compensation
 6 Months Ended
Dec. 31, 2012
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
December 31,

 

Six Months Ended
December 31,

 

 

2012 

 

2011 

 

2012 

 

2011 

 

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

 

 

 

 

Restricted stock and restricted stock unit (RSU) expense

$ 3,327

$3,620

$ 5,481

$6,226

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

174

411

 

420

 

1,017

 

 

 

 

 

Total stock-based compensation expense

$ 3,501

$ 4,031

$ 5,901

$ 7,243

 

 

 

 

 

Income tax benefit recognized for stock-based compensation expense

$ 1,302

$ 1,596

 

$ 2,216

 

$ 2,877

 

 

 

 

 

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. In addition, the Company may issue, with the approval of its Chief Executive Officer, equity instruments to other employees, including strategic new hires. In September 2012, the Company made its annual grant to its key employees consisting of 238,810 Performance Restricted Stock Units (PRSUs). The final number of such performance-based RSUs which will be considered earned by the participants and eventually vest is based on the achievement of a specified Net After Tax Profit (NATP) for the year ending June 30, 2013 and on the average share price of Company stock for the 90 day period ending September 14, 2013 as compared to the average share price for the 90 day period ended September 14, 2012. No PRSUs will be earned if the specified NATP for the fiscal year ending June 30, 2013 is not met. If NATP for the year ending June 30, 2013 exceeds the specified NATP and the average share price of the Company's stock for the 90 day period ending September 14, 2013 exceeds the average share price of the Company's stock for the 90 day period ending September 14, 2012 by 50 percent or more then an additional 238,810 RSUs could be earned by participants. This is the maximum number of additional RSUs that can be earned related to the September 2012 annual grant. In addition to the performance and market conditions, there is a service vesting condition which stipulates that 50 percent of the earned award will vest on September 1, 2015 and 50 percent of the earned award will vest on September 1, 2016, 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 and its predecessor plan is 12,450,000 as of December 31, 2012. 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 December 31, 2012, cumulative grants of 12,591,046 equity instruments underlying the shares authorized have been awarded, and 3,673,200 of these instruments have been forfeited.

Activity related to SSARs/non-qualified stock options and RSUs/restricted shares during the six months ended December 31, 2012 is as follows:

 

 

 

 

SSARs/

Non-qualified
Stock Options 

 

RSUs/
Restricted Shares 

 

Outstanding, June 30, 2012

1,683,698 
1,651,321 

Granted

—
284,637 

Exercised/Issued

(489,429)
(224,896)

Forfeited/Lapsed

(551,124)
(543,360)

 

 

 

Outstanding, December  31, 2012

643,145 
1,167,702 

 

 

 

Weighted average grant date fair value for RSUs/restricted shares granted during the six months ended December 31, 2012

 
$
65.77 

 

 

 

As of December 31, 2012, there was $0.4 million of total unrecognized compensation cost related to SSARs and stock options scheduled to be recognized over a weighted average period of 0.6 years, and $27.5 million of total unrecognized compensation cost related to restricted shares and RSUs scheduled to be recognized over a weighted-average period of 2.7 years.