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Share - Based Compensation | 12 Months Ended
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Jun. 30, 2014
Share-based Compensation [Abstract] |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Share-Based Incentive Plans The 2011 Plan, which expires in 2016, provides for granting of SARs, stock options, stock awards, cash awards, and such other awards or combination thereof as the Executive Organization and Compensation Committee or, in the case of director awards, the Corporate Governance Committee of the Board of Directors (together referred to as the Committee) may determine to officers, other key employees and members of the Board of Directors. Grants are generally made at regularly scheduled, committee meetings. Compensation costs charged to expense under award programs paid (or to be paid) with shares (including SARs, stock options, performance shares, restricted stock, and RSUs) are summarized in the table below:
Year Ended June 30, |  |  |  |  |
(Shares in thousands) | 2014 |  |  | 2013 |  |  | 2012 |
SARs and options | $ | 1,808 |  |  | $ | 2,317 |  |  | $ | 2,058 |
Performance shares | 309 |  |  | 1,074 |  |  | 1,983 |
Restricted stock and RSUs | 2,394 |  |  | 2,370 |  |  | 2,325 |
Total compensation costs under award programs | $ | 4,511 |  |  | $ | 5,761 |  |  | $ | 6,366 |
Such amounts are included in selling, distribution and administrative expense in the accompanying statements of consolidated income. It has been the practice of the Company to issue shares from treasury to satisfy requirements of awards paid with shares. The aggregate unrecognized compensation cost for share-based award programs paid (or with the potential to be paid) at June 30, 2014 are summarized in the table below:
June 30, (Shares in thousands) | 2014 |  |  | Expected Period of Recognition (Years)
SARs and options | $ | 1,947 |  |  | 2.5
Performance shares | 3,668 |  |  | 1.7
Restricted stock and RSUs | 2,024 |  |  | 1.5
Total unrecognized compensation costs under award programs | $ | 7,639 |  |  | 1.9
Cost of these programs will be recognized as expense over the weighted-average remaining vesting period of 1.9 years. The aggregate number of shares of common stock which may be awarded under the 2011 Plan is 2,000; shares available for future grants at June 30, 2014 were 1,398. Stock Appreciation Rights and Stock Options The weighted-average assumptions used for SARs and stock option grants issued in fiscal 2014, 2013 and 2012 are:
| 2014 |  |  | 2013 |  |  | 2012 |
Expected life, in years | 4.6 |  |  | 5.5 |  |  | 5.6 |
Risk free interest rate | 1.3 | % |  | 0.9 | % |  | 1.1 | %
Dividend yield | 2.5 | % |  | 2.5 | % |  | 2.5 | %
Volatility | 31.8 | % |  | 43.3 | % |  | 44.2 | %
Per share fair value of SARs and stock options granted during the year | $11.02 |  | $13.11 |  | $9.88
The expected life is based upon historical exercise experience of the officers, other key employees and members of the Board of Directors. The risk free interest rate is based upon U.S. Treasury zero-coupon bonds with remaining terms equal to the expected life of the SARs and stock options. The assumed dividend yield has been estimated based upon the Company’s historical results and expectations for changes in dividends and stock prices. The volatility assumption is calculated based upon historical daily price observations of the Company’s common stock for a period equal to the expected life. SARs are redeemable solely in Company common stock. The exercise price of stock option awards may be settled by the holder with cash or by tendering Company common stock. A summary of SARs and stock options activity is presented below:
Year Ended June 30, 2014 | Shares |  |  | Weighted-Average Exercise Price |
(Share amounts in thousands) |
Outstanding, beginning of year | 1,080 |  |  | $ | 28.79 |
Granted | 173 |  |  | 50.06 |
Exercised | (186 | ) |  | 21.34 |
Forfeited | (28 | ) |  | 38.76 |
Outstanding, end of year | 1,039 |  |  | $ | 33.40 |
Exercisable at end of year | 659 |  |  | $ | 28.88 |
The weighted-average remaining contractual terms for SARs and stock options outstanding and exercisable at June 30, 2014 were 5.9 and 4.6 years, respectively. The aggregate intrinsic values of SARs and stock options outstanding and exercisable at June 30, 2014 were $18,007 and $14,394, respectively. The aggregate intrinsic value of the SARs and stock options exercised during fiscal 2014, 2013 and 2012 was $5,241, $7,135 and $13,747, respectively. The total fair value of shares vested during fiscal 2014, 2013 and 2012 was $2,080, $2,135 and $4,266, respectively. Performance Shares Performance shares are intended to provide incentives to achieve three-year goals. Performance shares are paid in shares of Applied stock at the end of a three-year period provided the Company achieves goals established by the committee. The number of Applied shares payable will vary depending on the level of the goals achieved. A summary of nonvested performance shares activity at June 30, 2014 is presented below:
Year Ended June 30, 2014 | Shares |  |  | Weighted-Average Grant-Date Fair Value |
(Share amounts in thousands) |
Nonvested, beginning of year | 90 |  |  | $ | 30.45 |
Awarded | 8 |  |  | 50.40 |
Forfeitures | — |  |  | — |
Vested | (57 | ) |  | 29.27 |
Nonvested, end of year | 41 |  |  | $ | 35.97 |
The Committee set three one-year goals for each of the 2014, 2013 and 2012 grants. Each fiscal year during the three-year term has its own separate goals, tied to the Company’s earnings before interest, tax, depreciation, and amortization (EBITDA) and after-tax return on assets (ROA). Achievement during any particular fiscal year is awarded and “banked” for payout at the end of the three-year term. Based upon the outstanding grants as of June 30, 2014, the maximum number of shares which could be earned in future periods was 78. Restricted Stock and Restricted Stock Units Restricted stock award recipients are entitled to receive dividends on, and have voting rights with respect to their respective shares, but are restricted from selling or transferring the shares prior to vesting. Restricted stock awards vest over periods of one to four years. RSUs are grants valued in shares of Applied stock, but shares are not issued until the grants vest three years from the award date, assuming continued employment with Applied. Applied primarily pays dividend equivalents on RSUs on a current basis. A summary of the status of the Company’s non-vested restricted stock and RSUs at June 30, 2014 is presented below:
Year Ended June 30, 2014 | Shares |  |  | Weighted-Average Grant-Date Fair Value |
(Share amounts in thousands) |
Nonvested, beginning of year | 178 |  |  | $ | 32.96 |
Granted | 39 |  |  | 49.47 |
Forfeitures | (8 | ) |  | 33.80 |
Vested | (76 | ) |  | 33.13 |
Nonvested, end of year | 133 |  |  | $ | 37.60 |

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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