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STOCK-BASED COMPENSATION | 12 Months Ended
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Jun. 30, 2018
STOCK-BASED COMPENSATION |
STOCK-BASED COMPENSATION | 8. STOCK-BASED COMPENSATION On December 11, 2017, our stockholders approved our Amended and Restated 2012 Incentive Award Plan (the "2012 Plan"), which, among other things, increased the maximum number of shares of common stock which may be issued under the 2012 Plan by 1.6 million shares. As of June 30, 2018, we maintained the the 2012 Plan and the Amended and Restated 2006 Equity Participation Plan ("2006 Plan") as share-based employee compensation plans. No further grants may be made under the 2006 Plan. In addition, pursuant to the acquisition of AS&E, we 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". We recorded stock-based-compensation expense in the consolidated statement of operations as follows (in thousands):
|  | 2016 |  | 2017 |  | 2018 |
Cost of goods sold |  | $ | 1,199 |  | $ | 1,443 |  | $ | 972 |
Selling, general and administrative |  |  | 19,307 |  |  | 21,354 |  |  | 22,293 |
Research and development |  |  | 253 |  |  | 433 |  |  | 581 |
Restructuring |  |  | — |  |  | 2,902 |  |  | — |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Stock based compensation expense |  |  | 20,759 |  |  | 26,132 |  |  | 23,846 |
Less: Related income tax benefit |  |  | (7,762 | ) |  | (9,815 | ) |  | (7,391 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Stock based compensation expense, net |  | $ | 12,997 |  | $ | 16,317 |  | $ | 16,455 |
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As of June 30, 2018, total unrecognized compensation cost related to share-based compensation grants under the OSI Plans were estimated at $0.6 million for stock options and $14.2 million for RSUs. We expect to recognize these costs over a weighted-average period of 1.9 years with respect to the stock options and 2.1 years for grants of RSUs. Employee Stock Purchase Plan—We have an employee stock purchase plan under which eligible employees may purchase a limited number of shares of Common Stock at a discount of up to 15% of the market value of such stock at pre-determined, plan-defined dates. During the three years ended June 30, 2016, 2017 and 2018, employees purchased 60,375, 71,314 and 80,115 shares, respectively. As of June 30, 2018, there were 741,690 shares of our Common Stock available for issuance under the plan. OSI Plans In October 2017, our Board of Directors approved the 2012 Plan, and in December 2017, our stockholders adopted the 2012 Plan. Outstanding awards under the 2006 Plan continue to be subject to the terms and conditions of the 2006 Plan although no awards may be issued under the 2006 Plan. Under the 2012 Plan, we are authorized to grant awards in the form of incentive options, nonqualified options, restricted stock awards, stock appreciation rights, RSUs, performance shares and stock bonuses, amongst other forms of equity, to qualified employees, directors and consultants. Under the OSI Plans, the exercise price of nonqualified options and incentive stock options may not be less than the fair market value of our Common Stock on the date of grant. The exercise price of nonqualified options and incentive stock options granted to individuals who own more than 10% of our voting stock may not be less than 110% of the fair market value of our Common Stock on the date of grant. Stock options granted under the OSI Plans typically vest over three years based on continued service. Restricted stock and RSUs typically vest over three to four years based on continued service. Certain restricted stock awards granted to senior management vest based on the achievement of pre-established performance criteria. Stock Option Fair Value Estimation Assumptions. We estimate the fair value of our stock options at the date of grant using the Black-Scholes option-pricing valuation model. Our valuation model is affected by our stock price as well as weighted average assumptions for a number of subjective variables described below. Expected Dividend. Expected dividend is based on historical patterns and our anticipated dividend payments over the expected holding period. Risk-Free Interest Rate. The risk-free interest rate for stock options is based on U.S. Treasuries for a maturity matching the expected holding period. Expected Volatility. Expected volatility is based on our historical share price volatility matching the expected holding period. No single method of estimating volatility is proper under all circumstances and to the extent that a company can derive implied volatility based on the trading of its financial instruments on a public market, it may be appropriate to use both implied and historical volatility in its assumptions. We have certain financial instruments that are publicly traded from which we can derive the implied volatility. Therefore, we use implied and historical volatility for valuing our stock options. We believe that implied and historical volatility is a better indicator of expected volatility because it is generally reflective of both historical volatility and expectations of how future volatility will differ from historical volatility. Expected Holding Period. We use historical stock option exercise data to estimate the expected holding period. Changes in assumptions can materially impact the estimated fair value of stock options. The weighted average assumptions used in the valuation model are presented in the table below.
|  | 2016 |  | 2017 |  | 2018 |
Expected dividend |  |  | — |  |  | — |  |  | — |
Risk-free interest rate |  |  | 1.4 | % |  | 1.7 | % |  | 1.9 | %
Expected volatility |  |  | 31.0 | % |  | 33.0 | % |  | 29.0 | %
Expected holding period (in years) |  |  | 4.5 |  |  | 4.5 |  |  | 4.5 |
The following summarizes stock option activity for fiscal years 2016, 2017 and 2018:
|  | Number of Options |  | Weighted- Average Exercise Price |  | Weighted-Average Remaining Contractual Term |  | Aggregate Intrinsic Value (in thousands) |
Outstanding at June 30, 2015 |  |  | 1,012,650 |  |  | 27.30 |  |  |  |  |  |  |
Granted |  |  | 35,162 |  |  | 73.42 |  |  |  |  |  |  |
Exercised |  |  | (107,059 | ) |  | 28.05 |  |  |  |  |  |  |
Expired or forfeited |  |  | (6,641 | ) |  | 66.56 |  |  |  |  |  |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Outstanding at June 30, 2016 |  |  | 934,112 |  |  | 28.67 |  |  |  |  |  |  |
Granted |  |  | 19,176 |  |  | 73.42 |  |  |  |  |  |  |
Exercised |  |  | (168,564 | ) |  | 26.68 |  |  |  |  |  |  |
Expired or forfeited |  |  | (4,053 | ) |  | 68.28 |  |  |  |  |  |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Outstanding at June 30, 2017 |  |  | 780,671 |  | $ | 30.00 |  |  |  |  |  |  |
Granted |  |  | 25,379 |  |  | 85.83 |  |  |  |  |  |  |
Exercised |  |  | (121,651 | ) |  | 23.53 |  |  |  |  |  |  |
Expired or forfeited |  |  | (6,874 | ) |  | 73.77 |  |  |  |  |  |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Outstanding at June 30, 2018 |  |  | 677,525 |  | $ | 32.80 |  |  | 2.9 years |  | $ | 30,364 |
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Exercisable at June 30, 2018 |  |  | 635,160 |  | $ | 29.62 |  |  | 2.5 years |  | $ | 30,301 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
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The per-share weighted-average grant-date fair value of stock options granted under the OSI Plans was $20.66, $22.19 and $23.64 for fiscal 2016, 2017 and 2018, respectively. The total intrinsic value of options exercised during fiscal 2018 was $6,295,000. Restricted Stock Awards and Restricted Stock Units—A summary of restricted stock award and RSU activity for the periods indicated was as follows:
|  | Shares |  | Weighted- Average Fair Value |
Nonvested at June 30, 2015 |  |  | 659,906 |  | $ | 63.75 |
Granted |  |  | 337,628 |  |  | 72.90 |
Vested |  |  | (417,896 | ) |  | 65.36 |
Forfeited |  |  | (49,140 | ) |  | 67.70 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Nonvested at June 30, 2016 |  |  | 530,498 |  | $ | 67.94 |
Granted |  |  | 379,888 |  |  | 64.55 |
Vested |  |  | (299,277 | ) |  | 67.87 |
Net replacement RSUs (1) |  |  | 20,953 |  |  | 67.76 |
Forfeited |  |  | (20,375 | ) |  | 68.34 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Nonvested at June 30, 2017 |  |  | 611,687 |  | $ | 65.85 |
Granted |  |  | 351,034 |  |  | 74.09 |
Vested |  |  | (413,639 | ) |  | 65.33 |
Forfeited |  |  | (22,705 | ) |  | 70.32 |
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Nonvested at June 30, 2018 |  |  | 526,377 |  | $ | 71.56 |
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(1) | Pursuant to the acquisition of AS&E, we assumed unvested RSUs originally granted by AS&E and converted them into RSUs for our Common Stock.
The per-share weighted average grant-date fair value of restricted stock and RSUs granted under the OSI Plans was $72.90, $64.55 and $74.09 for fiscal 2016, 2017 and 2018, respectively. The total fair value of shares vested during fiscal 2016, 2017 and 2018 was $27.3 million, $23.2 million and $27.0 million, respectively. As of June 30, 2018, there were approximately 2.3 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. We granted 139,300, 156,836 and 117,346 performance-based awards during fiscal 2016, 2017 and 2018, respectively. These performance-based RSU awards are contingent on the achievement of certain performance metrics. The payout related to these awards can range from zero to 250% of the original number of shares or units awarded.

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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 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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