Stock-Based Compensation

Equity Awards Issued Under the Malibu Boats, Inc. Long-Term Incentive Plan

On January 6, 2014, the Company’s board of directors adopted the Malibu Boats, Inc. Incentive Plan. The Incentive Plan, which became effective on January 1, 2014, reserves for issuance up to 1,700,000 shares of Malibu Boats, Inc. Class A Common Stock for the Company’s employees, consultants, members of its board of directors and other independent contractors at the discretion of the compensation committee. Incentive stock awards authorized under the Incentive Plan including unrestricted shares of Class A Common Stock, stock options, SARs, restricted stock, restricted stock units, dividend equivalent awards and performance awards. As of June 30, 2016, there were 1,386,660 shares available for future issuance under Incentive Plan.

On May 16, 2015, the Company granted 12,050 restricted stock unit awards to key employees under the Incentive Plan with a grant date fair value of $20.67 per unit. On June 27, 2014, the Company granted 46,250 restricted stock unit awards to key employees under the Incentive Plan with a grant date fair value of $20.03 per unit. Under the terms of the agreements, the awards will vest 25% ratably on each anniversary of their grant date. Stock-based compensation expense attributable to these restricted stock units is amortized on a straight-line basis over the requisite service period.

On November 6, 2015, the Company granted 130,564 restricted stock unit and restricted stock awards to certain key employees. The grant date fair value of these awards was $1,994 based on a stock price of $15.27 per share on the date of grant. Under the terms of the agreements, approximately 12% of the awards vested immediately on the grant date, approximately 38% vest in substantially equal annual installments over a three or four year period, and the remaining 50% of the awards vest in tranches based on the achievement of annual or cumulative performance targets. Compensation costs associated with performance based awards are recognized over the requisite service period based on probability of achievement in accordance with ASC Topic 718, Compensation—Stock Compensation.

As of June 30, 2016, the weighted-average years non-vested for service period awards and performance target awards was approximately 2.3 years and 1.8 years, respectively.

The Company's non-employee directors receive an annual retainer for their services as directors consisting of both a cash retainer and equity awards in the form of Class A Common Stock or restricted stock units. Directors may elect that their cash annual retainer be converted into either fully vested shares of Class A Common Stock or restricted stock units paid on a deferral basis. Equity awards issued to directors are fully vested at the date of grant. Directors receiving restricted stock units as compensation for services have no rights as a stockholder of the Company, no dividend rights (except with respect to dividend equivalent rights), and no voting rights until Class A Common Stock is actually issued to them upon separation from service or change in control as defined in the Incentive Plan. If dividends are paid by the Company to its stockholders, directors would be entitled to receive an equal number of restricted stock units based on their proportional interest. For the fiscal year ended June 30, 2014, the Company issued 9,371 shares of Class A Common Stock and 60,693 restricted stock units to its non-employee directors for their services as directors pursuant to the Incentive Plan. The grant date fair value for the Class A Common Stock and restricted stock units received for the equity portion of the annual retainer was $14.00 and the grant date fair value for the portion of the cash retainer elected to be received in equity was $20.10. For the fiscal year ended June 30, 2015, the Company issued 3,101 shares of Class A Common Stock and 9,303 restricted stock units with a weighted-average grant date fair value of $18.52 to its non-employee directors for their services as directors pursuant to the Incentive Plan. For the fiscal year ended June 30, 2016, the Company issued 8,688 shares of Class A Common Stock and 43,508 restricted stock units with a weighted-average grant date fair value of $14.38 to its non-employee directors for their services as directors pursuant to the Incentive Plan.

The following table presents the number and weighted-average grant date fair value of the Company’s director and employee restricted stock units and restricted stock awards:



	Fiscal Year Ended June 30,
	2016				2015				2014
	Number of Restricted Stock Units and Restricted Stock Awards Outstanding		Weighted Average Grant Date Fair Value		Number of Restricted Stock Units and Restricted Stock Awards Outstanding		Weighted Average Grant Date Fair Value		Number of Restricted Stock Units and Restricted Stock Awards Outstanding			Weighted Average Grant Date Fair Value
Total Non-vested Restricted Stock Units and Restricted Stock Awards at beginning of year	44,775		$	20.20	46,155		$	20.03	$	—		$	—
Granted	174,072		15.05		21,353		20.44		106,943			16.82
Vested	(69,751	)	15.62		(20,733	)	15.83		(60,788		)	14.38
Forfeited	(8,188	)	20.13		(2,000	)	20.03		—			—
Total Non-vested Restricted Stock Units and Restricted Stock Awards at end of year	140,908		$	16.17	44,775		$	20.20	46,155			$	20.03

Stock compensation expense attributable to all of the Company's equity awards was $1,947, $1,467 and $2,577 for fiscal years 2016, 2015 and 2014, respectively, including $1,066, $1,242 and $2,520 of expense related to profit interest awards previously granted prior to the IPO under the former LLC agreement for fiscal years 2016, 2015 and 2014, respectively, and is included in general and administrative expense in the Company's consolidated statement of operations and comprehensive income (loss). The cash flow effects resulting from all equity awards were reflected as noncash operating activities. During fiscal year 2016, the Company withheld approximately 8,876 shares at an aggregate cost of approximately $156, as permitted by the applicable equity award agreements, to satisfy employee tax withholding requirements for employee share-based equity awards that have vested. As of June 30, 2016 and 2015, unrecognized compensation cost related to nonvested, share-based compensation was $2,131 and $2,258, respectively, of which $283 and $1,350 represent the unearned portion attributable to profit interest awards as of June 30, 2016 and 2015, respectively. Remaining profit interest awards will be fully vested in the first quarter of fiscal year 2017.