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Stockholders' Equity
 6 Months Ended
Dec. 31, 2016
Stockholders' Equity  
Stockholders' Equity

7. Stockholders’ Equity

 

Stock-based Compensation

 

As of December 31, 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 or the 2014 AS&E Plan. The 2012 Plan, the 2006 Plan, the 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
December 31,

 

Six Months Ended
December 31,

 

 

 

2015

 

2016

 

2015

 

2016

 

Cost of goods sold

 

$
305

 

$
404

 

$
597

 

$
699

 

Selling, general and administrative

 
3,911

 
5,222

 
8,019

 
10,282

 

Research and development

 
73

 
121

 
138

 
176

 

Restructuring

 

—

 
2,482

 

—

 
2,902

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense before taxes

 

$
4,289

 

$
8,229

 

$
8,754

 

$
14,059

 

Less: related income tax benefit

 
(1,635

)
(3,206

)
(3,334

)
(5,450

)

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense, net of estimated taxes

 

$
2,654

 

$
5,023

 

$
5,420

 

$
8,609

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2016, total unrecognized compensation cost related to share-based compensation grants were estimated at $0.8 million for stock options and $25.8 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 1.9 years.

 

The following summarizes stock option activity during the six months ended December 31, 2016:

 

 

 

Number of
Options

 

Weighted-
Average
Exercise
Price

 

Weighted-Average
Remaining Contractual
Term

 

Aggregate
Intrinsic Value
(in thousands)

 

Outstanding at June 30, 2016

 
934,112

 

$
28.67

 

 

 

 

 

Granted

 
15,591

 

$
73.63

 

 

 

 

 

Exercised

 
(95,353

)

$
21.71

 

 

 

 

 

Expired or forfeited

 
(2,287

)

$
71.42

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at December 31, 2016

 
852,063

 

$
30.16

 

3.7 years

 

$
39,161

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable at December 31, 2016

 
803,355

 

$
27.62

 

3.4 years

 

$
38,960

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following summarizes restricted stock and RSU award activity during the six months ended December 31, 2016:

 

 

 

Shares

 

Weighted-
Average
Fair Value

 

Nonvested at June 30, 2016

 
530,498

 

$
67.94

 

Granted

 
373,709

 
65.47

 

Vested

 
(294,049

)
69.42

 

Net replacement RSUs (1)

 
58,939

 
67.76

 

Forfeited

 
(17,229

)
68.04

 

 

 

 

 

 

 

Nonvested at December 31, 2016

 
651,868

 

$
65.84

 

 

 

 

 

 

 

 

 

(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 December 31, 2016, there were approximately 1.3 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 six months ended December 31, 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

 

The Board of Directors authorized stock repurchase programs totaling 5.5 million shares, of which 955,121 are still available. These programs do not expire. 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.