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Stockholders' Equity
 3 Months Ended
Sep. 30, 2016
Stockholders' Equity  
Stockholders' Equity

 

7. Stockholders’ Equity

 

Stock-based Compensation

 

As of September 30, 2016, the Company maintained two share-based employee compensation plans: the 2012 Incentive Award Plan (“2012 Plan”) and the Amended and Restated 2006 Equity Participation Plan (“2006 Plan”).  Upon stockholder approval of the 2012 Plan, the Company ceased to make grants under the 2006 Plan. In addition, pursuant to the acquisition of AS&E, the Company assumed two share-based employee compensation plans: the AS&E 2005 Equity and Incentive Plan (“2005 AS&E Plan”) and the AS&E 2014 Equity and Incentive Plan (“2014 AS&E Plan”). No new RSU grants will be made under the 2005 AS&E Plan and the 2014 AS&E Plan. The 2012 Plan, 2006 Plan, 2005 AS&E Plan and the 2014 AS&E Plan are collectively referred to as the “OSI Plans”.

 

The Company recorded stock-based compensation expense in the condensed consolidated statements of operations as follows (in thousands):

 

 

 

Three Months Ended September 30,

 

 

 

2015

 

2016

 

Cost of goods sold

 

$
292

 

$
295

 

Selling, general and administrative

 
4,108

 
5,060

 

Research and development

 
65

 
55

 

 

 

 

 

 

 

Stock based compensation expense

 
4,465

 
5,410

 

Less: Related income tax benefit

 
(1,699

)
(2,142

)

 

 

 

 

 

 

Stock based compensation expense, net

 

$
2,766

 

$
3,268

 

 

 

 

 

 

 

 

 

 

As of September 30, 2016, total unrecognized compensation cost related to share-based compensation grants were estimated at $0.6 million for stock options and $29.9 million for restricted stock and restricted stock units (“RSUs”) under the OSI Plans.  The Company expects to recognize these costs over a weighted-average period of 1.8 years.

 

The following summarizes stock option activity during the three months ended September 30, 2016:

 

 

 

 

 

Weighted Average

 

Weighted-Average

 

Aggregate

 

 

 

Number of

 

Exercise

 

Remaining Contractual

 

Intrinsic Value

 

 

 

Options

 

Price

 

Term

 

(in thousands)

 

Outstanding at June 30, 2016

 
934,112

 

$
28.67

 

 

 

 

 

Granted

 
328

 

$
61.17

 

 

 

 

 

Exercised

 
(4,136

)

$
46.97

 

 

 

 

 

Expired or forfeited

 
(2,287

)

$
71.42

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at September 30, 2016

 
928,017

 

$
28.50

 

3.7 years

 

$
34,600

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable at September 30, 2016

 
893,538

 

$
26.85

 

3.5 years

 

$
34,580

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following summarizes restricted stock and RSU award activity during the three months ended September 30, 2016:

 

 

 

 

 

Weighted-

 

 

 

 

 

Average

 

 

 

Shares

 

Fair Value

 

Nonvested at June 30, 2016

 
530,498

 

$
67.94

 

Granted

 
187,815

 

$
61.26

 

Vested

 
(24,646

)

$
68.71

 

Replacement RSUs(1)

 
65,954

 

$
67.76

 

Forfeited

 
(3,362

)

$
70.21

 

 

 

 

 

 

 

 

Nonvested at September 30, 2016

 
756,259

 

$
66.23

 

 

 

 

 

 

 

 

 

Note 1 – Pursuant to the acquisition of AS&E, the Company assumed unvested RSUs originally granted by AS&E and converted them into RSUs for the Company’s common stock.

 

As of September 30, 2016, there were approximately 1.7 million shares available for grant under the 2012 Plan.  Under the terms of the 2012 Plan, RSUs and restricted stock granted from the pool of shares available for grant reduce the pool by 1.87 shares for each award granted. RSUs and restricted stock forfeited and returned to the pool of shares available for grant increase the pool by 1.87 shares for each award forfeited.

 

The Company granted 139,300 and 155,488 performance-based RSUs during the three months ended September 30, 2015 and 2016, respectively. These performance-based RSUs are contingent on the achievement of certain performance metrics. The payout can range from zero to 250% of the original number of shares or units awarded.

 

Share Repurchase Program

 

In March 1999, the Board of Directors authorized a stock repurchase program of up to 2 million shares. In each of September 2004 and April 2013, the Board of Directors authorized an additional 1 million shares for repurchase pursuant to this program, and in October 2015, the Board of Directors authorized an additional 500,000 shares for repurchase pursuant to this program.  In April 2016, the Board of Directors authorized a new stock repurchase program of up to one million shares.  As of September 30, 2016, there were 1,020,763 of available shares that may be repurchased under these programs. These programs do not have expiration dates. Upon repurchase, the shares are restored to the status of authorized but unissued, and the Company records them as a reduction in the number of shares of common stock issued and outstanding in the consolidated financial statements.