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Stock-Based Compensation | 12 Months Ended
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Jul. 01, 2022
Share-based Payment Arrangement [Abstract] |
Stock-Based Compensation | Stock-Based Compensation S TOCK I NCENTIVE P LANS The Board of Directors approved the Company’s 2018 Stock Incentive Plan (the “2018 Plan”) on July 23, 2018. The 2018 Plan became effective upon the approval of shareholders at the Company’s annual meeting held on October 24, 2018. The aggregate number of shares authorized for issuance under the 2018 Plan is 6,782 shares, with an additional 710 shares rolled into the 2018 Plan that were available for future grant under the Company’s 2005 Stock Incentive Plan, as amended and restated (the “2005 Plan”) and 3,000 shares approved by the Company's shareholders on October 28, 2020. The 2018 Plan replaced the 2005 Plan. The shares authorized for issuance under the 2018 Plan will continue to be increased by any future cancellations, forfeitures or terminations (other than by exercise) of awards under the 2005 Plan. The foregoing does not affect any outstanding awards under the 2005 Plan, which remain in full force and effect in accordance with their terms. The 2018 Plan provides for the grant of non-qualified and incentive stock options, restricted stock, stock appreciation rights and deferred stock awards to employees and non-employees. There were 192 shares available for future grant under the 2018 Plan at July 1, 2022. As part of the Company's ongoing annual equity grant program for employees, the Company grants performance-based restricted stock awards to certain executives and employees pursuant to the 2018 Plan. Performance awards vest based on the requisite service period subject to the achievement of specific financial performance targets. Based on the performance targets, some of these awards require graded vesting which results in more rapid expense recognition compared to traditional time-based vesting over the same vesting period. The Company monitors the probability of achieving the performance targets on a quarterly basis and may adjust periodic stock compensation expense accordingly based on its determination of the likelihood for reaching targets. The performance targets generally include the achievement of internal performance targets in relation to a peer group of companies. On February 7, 2022, the Company’s Board of Directors approved an equity retention plan at the recommendation of the Company’s Human Capital and Compensation Committee, after consultation with its independent compensation consultant. Employees participating in the equity retention plan were granted their annual equity awards for fiscal 2023 on February 15, 2022, which is approximately six months earlier than the Company’s typical annual cycle for such grants. The plan is intended to encourage leaders to remain focused on the mission and drive long-term performance, to retain the recipients in the current challenging industry environment and labor market, and to reinforce the alignment of the recipients’ interests with the Company’s shareholders. On February 15, 2022, the Human Capital and Compensation Committee expanded the scope of the equity retention plan by approving a pool of restricted stock unit awards for non-executive employees. These awards were intended to recognize the recipients’ substantial contributions, to retain and motivate the recipients in the current challenging industry environment and labor market and to reinforce the alignment of the recipients’ interests with the Company’s shareholders. The vesting of such awards was conditioned on shareholder approval of sufficient additional shares for the 2018 Plan for the Company to deliver the shares to satisfy the awards, and with awards expiring on the seventh anniversary of the grant date if shareholder approval is not obtained prior to such date. E MPLOYEE S TOCK P URCHASE P LAN The number of shares authorized for issuance under the Company’s 1997 Employee Stock Purchase Plan, as amended and restated (“ESPP”), is 2,300 shares, including 500 shares approved by the Company's shareholders on October 28, 2020. Under the ESPP, rights are granted to purchase shares of common stock at 85% of the lesser of the market value of such shares at either the beginning or the end of each six-month offering period. The ESPP permits employees to purchase common stock through payroll deductions, which may not exceed 10% of an employee’s compensation as defined in the ESPP. The number of shares issued under the ESPP during fiscal years 2022, 2021 and 2020 was 115, 101 and 89, respectively. Shares available for future purchase under the ESPP totaled 313 at July 1, 2022. S TOCK A WARD A CTIVITY The following table summarizes the status of the Company’s non-vested restricted stock awards since July 3, 2020:
| Non-Vested Restricted Stock Awards
| Number of Shares |  | Weighted Average Grant Date Fair Value
Outstanding at July 3, 2020 | 957 |  |  | $ | 61.59 |
Granted | 570 |  |  | 76.03 |
Vested | (436) |  |  | 53.08 |
Forfeited | (78) |  |  | 69.54 |
Outstanding at July 2, 2021 | 1,013 |  |  | $ | 70.77 |
Granted | 1,993 |  |  | 52.70 |
Vested | (477) |  |  | 61.42 |
Forfeited | (224) |  |  | 66.66 |
Outstanding at July 1, 2022 | 2,305 |  |  | $ | 57.47 |
The total fair value of restricted stock awards vested during fiscal years 2022, 2021 and 2020 was $25,533, $34,342 and $46,089, respectively. Non-vested restricted stock awards are subject to the risk of forfeiture until the fulfillment of specified conditions. As of July 1, 2022, there was $89,183 of total unrecognized compensation cost related to non-vested restricted stock awards granted under the Company’s stock plans that is expected to be recognized over a weighted-average period of 2.6 years from July 1, 2022. As of July 2, 2021, there was $48,629 of total unrecognized compensation cost related to non-vested restricted stock awards granted under the Company’s stock plans that is expected to be recognized over a weighted-average period of 2.4 years from July 2, 2021. S TOCK-BASED C OMPENSATION E XPENSE The Company recognizes expense for its share-based payment plans in the Consolidated Statements of Operations and Comprehensive Income in accordance with ASC 718. The Company had $1,229 and $796 of capitalized stock-based compensation expense on the Consolidated Balance Sheets as of July 1, 2022 and July 2, 2021, respectively. Under the fair value recognition provisions of ASC 718, stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the service period. The following table presents share-based compensation expenses from continuing operations included in the Company’s Consolidated Statements of Operations and Comprehensive Income:
| Fiscal Years Ended
| July 1, 2022 |  | July 2, 2021 |  | July 3, 2020
Cost of revenues | $ | 2,161 |  |  | $ | 2,037 |  |  | $ | 989 |
Selling, general and administrative | 30,116 |  |  | 21,866 |  |  | 21,688 |
Research and development | 6,016 |  |  | 4,387 |  |  | 3,861 |
Stock-based compensation expense before tax | 38,293 |  |  | 28,290 |  |  | 26,538 |
Income taxes | (10,339) |  |  | (7,355) |  |  | (6,900) |
Stock-based compensation expense, net of income taxes | $ | 27,954 |  |  | $ | 20,935 |  |  | $ | 19,638 |

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