Stock-Based Compensation

12 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

STOCK INCENTIVE PLANS

The Board of Directors approved the Company’s 2018 Stock Incentive Plan (the “2018 Plan”) on July 23, 2018. The 2018 Plan became effective upon the approval of shareholders at the Company’s annual meeting held on October 24, 2018. The aggregate number of shares authorized for issuance under the 2018 Plan is 6,782 shares, with an additional 710 shares rolled into the 2018 Plan that were available for future grant under the Company’s 2005 Stock Incentive Plan, as amended and restated (the “2005 Plan”) and increases of 3,000 and 2,000 shares approved by the Company's shareholders on October 28, 2020 and October 26, 2022, respectively. The 2018 Plan replaced the 2005 Plan. The 2018 Plan provides for the grant of non-qualified and incentive stock options, restricted stock, stock appreciation rights and deferred stock awards to employees and non-employees. There were 3,512 shares available for future grant under the 2018 Plan at June 30, 2023.

As part of the Company's ongoing annual equity grant program for employees, the Company grants performance-based restricted stock awards to certain executives and employees pursuant to the 2018 Plan. Performance awards vest based on the requisite service period subject to the achievement of specific financial performance targets. Based on the performance targets, some of these awards require graded vesting which results in more rapid expense recognition compared to traditional time-based vesting over the same vesting period. The Company monitors the probability of achieving the performance targets on a quarterly basis and may adjust periodic stock compensation expense accordingly based on its determination of the likelihood for reaching targets. The performance targets generally include the achievement of internal performance targets in relation to a peer group of companies.

EMPLOYEE STOCK PURCHASE PLAN

The number of shares authorized for issuance under the Company’s 1997 Employee Stock Purchase Plan, as amended and restated (“ESPP”), is 2,300 shares, including 500 shares approved by the Company's shareholders on October 28, 2020. Under the ESPP, rights are granted to purchase shares of common stock at 85% of the lesser of the market value of such shares at either the beginning or the end of each six-month offering period. The ESPP permits employees to purchase common stock through payroll deductions, which may not exceed 10% of an employee’s compensation as defined in the ESPP. The number of shares issued under the ESPP during fiscal years 2023, 2022 and 2021 was 145, 115 and 101, respectively. Shares available for future purchase under the ESPP totaled 168 at June 30, 2023.

STOCK AWARD ACTIVITY


	Non-Vested Restricted Stock Awards
	Number of Shares	Weighted Average Grant Date Fair Value
















Outstanding at July 2, 2021	1,013	$	70.77
Granted	1,993	52.70
Vested	(477)	61.42
Forfeited	(224)	66.66
Outstanding at July 1, 2022	2,305	$	57.47
Granted	298	51.90
Vested	(738)	60.89
Forfeited	(526)	55.66
Outstanding at June 30, 2023	1,339	$	54.45

The total fair value of restricted stock awards vested during fiscal years 2023, 2022 and 2021 was $25,587, $25,533 and $34,342, respectively.

Non-vested restricted stock awards are subject to the risk of forfeiture until the fulfillment of specified conditions. As of June 30, 2023, there was $50,292 of total unrecognized compensation cost related to non-vested restricted stock awards granted under the Company’s stock plans that is expected to be recognized over a weighted-average period of 1.8 years from June 30, 2023.

STOCK-BASED COMPENSATION EXPENSE

The Company recognizes expense for its share-based payment plans in the Consolidated Statements of Operations and Comprehensive (Loss) Income in accordance with ASC 718. The Company had $1,215 and $1,229 of capitalized stock-based compensation expense on the Consolidated Balance Sheets as of June 30, 2023 and July 1, 2022, respectively. Under the fair value recognition provisions of ASC 718, stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the service period. The following table presents share-based compensation expenses from continuing operations included in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income:


	Fiscal Years Ended
	June 30, 2023		July 1, 2022		July 2, 2021
Cost of revenues	$	2,926	$	2,161	$	2,037
Selling, general and administrative	18,335		30,116		21,866
Research and development	6,492		6,016		4,387
Stock-based compensation expense before tax	27,753		38,293		28,290
Income taxes	(7,216)		(10,339)		(7,355)
Stock-based compensation expense, net of income taxes	20,537		$	27,954	$	20,935