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Stock-Based Compensation | 6 Months Ended
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Dec. 31, 2016
Stock-Based Compensation [Abstract] |
Stock-Based Compensation | 13. Stock-based compensation Stock option and restricted stock activity Options The following table summarizes stock option activity for the six months ended December 31, 2016 and 2015:
|  |  |  |  |  | Weighted |  |  |  |  |  |
|  |  |  | Weighted |  | average |  |  |  |  |  | Weighted
|  |  |  | average |  | remaining |  |  | Aggregate |  |  | average
|  |  |  | exercise |  | contractual |  |  | intrinsic |  |  | grant date
| Number of |  |  | price |  | term |  |  | value |  |  | fair value
| shares |  |  | ($) |  | (in years) |  |  | ($'000) |  |  | ($)
Outstanding – June 30, 2016 | 2,077,524 |  |  | 15.92 |  | 3.65 |  |  | 926 |  |  |
Expired unexercised | (474,443 | ) |  | 22.51 |  |  |  |  |  |  |  |
Outstanding – December 31, |  |  |  |  |  |  |  |  |  |  |  |
2016 | 1,603,081 |  |  | 13.98 |  | 4.25 |  |  | 1,685 |  |  |
Outstanding – June 30, 2015 | 2,401,169 |  |  | 15.34 |  | 4.74 |  |  | 11,516 |  |  |
Exercised | (323,645 | ) |  | 11.62 |  |  |  |  | 2,669 |  |  |
Outstanding – December 31, |  |  |  |  |  |  |  |  |  |  |  |
2015 | 2,077,524 |  |  | 15.92 |  | 4.08 |  |  | 3,623 |  |  |
No stock options were awarded during the three and six months ended December 31, 2016 or 2015, respectively. There were no forfeitures during the three and six months ended December 31, 2016 or during the three and six months ended December 31, 2015; however, during the six months ended December 31, 2016, 474,443 stock options awarded in August 2016, expired unexercised. The following table presents stock options vested and expecting to vest as of December 31, 2016:
|  |  | Weighted |  |  |
|  | Weighted | average |  |  |
|  | average | remaining |  | Aggregate |
|  | exercise | contractual |  | intrinsic |
| Number of | price | term |  | value |
| shares | ($) | (in years) |  | ($'000) |
Vested and expecting to vest |  |  |  |  |  |
– December 31, 2016 | 1,603,081 | 13.98 | 4.25 |  | 1,685 |
These options have an exercise price range of $7.35 to $24.46. The following table presents stock options that are exercisable as of December 31, 2016:
|  |  | Weighted |  |  |
|  | Weighted | average |  |  |
|  | average | remaining |  | Aggregate |
|  | exercise | contractual |  | intrinsic |
| Number of | price | term |  | value |
| shares | ($) | (in years) |  | ($'000) |
Exercisable – December 31, 2016 | 1,448,278 | 14.28 | 3.87 |  | 1,646 |
No stock options became exercisable during the three months ended December 31, 2016 and 2015, respectively. During the six months ended December 31, 2016 and 2015, respectively, 154,803 and 373,435 stock options became exercisable. No stock options were exercised during the three and six months ended December 31, 2016, and during the three months ended December 31, 2015. The Company received approximately $3.8 million from the exercise of 323,645 stock options, during the six months ended December 31, 2015. The Company issues new shares to satisfy stock option exercises. Restricted stock The following table summarizes restricted stock activity for the six months ended December 31, 2016 and 2015:
| Number of |  | Weighted
| shares of |  | average grant
| restricted |  | date fair value
| stock |  | ($'000)
Non-vested – June 30, 2016 | 589,447 |  | 7,622
Granted – August 2016 | 387,000 |  | 4,145
Vested – August 2016 | (72,091 | ) | 735
Non-vested – December 31, 2016 | 904,356 |  | 11,142
Non-vested – June 30, 2015 | 341,529 |  | 1,759
Granted – August 2015 | 319,492 |  | 581
Vested – August 2015 | (71,574 | ) | 1,435
Non-vested – December 31, 2015 | 589,447 |  | 7,622
The August 2016 grants comprise 350,000 and 37,000 shares of restricted stock awarded to executive officers and non-employee directors, respectively. The shares of restricted stock awarded to executive officers in August 2016 are subject to time-based and performance-based vesting conditions. In order for any of the shares to vest, the recipient must remain employed by the Company on a full-time basis on the date that it files its Annual Report on Form 10-K for the fiscal year ended June 30, 2019. If that condition is satisfied, then the shares will vest based on the level of Fundamental EPS the Company achieves for the fiscal year ended June 30, 2019 ("2019 Fundamental EPS"), as follows: One-third of the shares will vest if the Company achieves 2019 Fundamental EPS of $2.60; Two-thirds of the shares will vest if the Company achieves 2019 Fundamental EPS of $2.80; and All of the shares will vest if the Company achieves 2019 Fundamental EPS of $3.00. At levels of 2019 Fundamental EPS greater than $2.60 and less than $3.00, the number of shares that will vest will be determined by linear interpolation relative to 2019 Fundamental EPS of $2.80. Any shares that do not vest in accordance with the above-described conditions will be forfeited. All shares of restricted stock have been valued utilizing the closing price of shares of the Company's common stock quoted on The Nasdaq Global Select Market on the date of grant. The August 2015 grants comprise 301,537 and 17,955 shares of restricted stock awarded to employees and non-employee directors, respectively. The shares of restricted stock awarded to employees in August 2015 are subject to time-based and performance-based vesting conditions. In order for any of the shares to vest, the recipient must remain employed by the Company on a full-time basis on the date that it files its Annual Report on Form 10-K for the fiscal year ended June 30, 2018. If that condition is satisfied, then the shares will vest based on the level of Fundamental EPS the Company achieves for the fiscal year ended June 30, 2018 ("2018 Fundamental EPS"), as follows: One-third of the shares will vest if the Company achieves 2018 Fundamental EPS of $2.88; Two-thirds of the shares will vest if the Company achieves 2018 Fundamental EPS of $3.30; and All of the shares will vest if the Company achieves 2018 Fundamental EPS of $3.76. At levels of 2018 Fundamental EPS greater than $2.88 and less than $3.76, the number of shares that will vest will be determined by linear interpolation relative to 2018 Fundamental EPS of $3.30. Any shares that do not vest in accordance with the above-described conditions will be forfeited. All shares of restricted stock have been valued utilizing the closing price of shares of the Company's common stock quoted on The Nasdaq Global Select Market on the date of grant. The Company has reversed the stock-based compensation charge recognized to date related to the 301,537 shares of restricted stock because it believes that it is unlikely that the 2018 Fundamental EPS target will be achieved due to the dilutive impact on the fundamental EPS calculation as a result of issuance of the approximate 10 million shares to the IFC in May 2016. The fair value of restricted stock vesting during the six months ended December 31, 2016 and 2015, respectively, was $0.7 million and $1.4 million. Stock-based compensation charge and unrecognized compensation cost The Company has recorded a stock-based compensation charge of $0.6 million and $1.0 million, respectively, during the three months ended December 31, 2016 and 2015, which comprised:
|  |  |  | Allocated to cost |  |
|  |  |  | of goods sold, IT |  | Allocated to
|  |  |  | processing, |  | selling, general
|  | Total |  | servicing and |  | and
|  | charge |  | support |  | administration
Three months ended December 31, 2016 |  |  |  |  |  |
Stock-based compensation charge | $ | 635 | $ | - | $ | 635
Total – three months ended December 31, 2016 | $ | 635 | $ | - | $ | 635
Three months ended December 31, 2015 |  |  |  |  |  |
Stock-based compensation charge | $ | 965 | $ | - | $ | 965
Total – three months ended December 31, 2015 | $ | 965 | $ | - | $ | 965
The Company has recorded a stock-based compensation (reversal) charge, net of ($0.7 million) and $0.7 million, respectively, during the six months ended December 31, 2016 and 2015, which comprised:
|  |  |  |  | Allocated to cost |  |  |
|  |  |  |  | of goods sold, IT |  | Allocated to |
|  |  |  |  | processing, |  | selling, general |
|  | Total |  |  | servicing and |  | and |
|  | charge |  |  | support |  | administration |
Six months ended December 31, 2016 |  |  |  |  |  |  |  |
Stock-based compensation charge | $ | 1,138 |  | $ | - | $ | 1,138 |
Reversal of stock compensation charge related to |  |  |  |  |  |  |  |
restricted stock |  | (1,827 | ) |  | - |  | (1,827 | )
Total – six months ended December 31, 2016 | $ | (689 | ) | $ | - | $ | (689 | )
Six months ended December 31, 2015 |  |  |  |  |  |  |  |
Stock-based compensation charge | $ | 1,691 |  | $ | - | $ | 1,691 |
Total – six months ended December 31, 2015 | $ | 1,691 |  | $ | - | $ | 1,691 |
The stock-based compensation charges have been allocated to selling, general and administration based on the allocation of the cash compensation paid to the employees. As of December 31, 2016, the total unrecognized compensation cost related to stock options was approximately $0.5 million, which the Company expects to recognize over approximately one year. As of December 31, 2016, the total unrecognized compensation cost related to restricted stock awards was approximately $4.1 million, which the Company expects to recognize over approximately two years. This amount excludes the total unrecognized compensation cost as of December 31, 2016, related to restricted stock awards that the Company expects will not vest due to it not achieving the 2018 Fundamental EPS of approximately $6.0 million. As of December 31, 2016, the cumulative unrecorded stock-based compensation charge related to these awards of restricted stock that the Company has determined are expected not to vest and has not expensed in its consolidated statement of operations is approximately $2.9 million (which amount includes the $1.8 million reversed). As of December 31, 2016 and June 30, 2016, respectively, the Company has recorded a deferred tax asset of approximately $1.7 million and 1.8 million related to the stock-based compensation charge recognized related to employees and directors of Net1 as it is able to deduct the grant date fair value for taxation purposes.

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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 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=65895303&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68057994&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 14) -URI http://asc.fasb.org/extlink&oid=27013229&loc=d3e301413-122809 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
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