Share-Based Payments

12 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

We recognize expense for the estimated fair value of all share-based payments to employees over the awards vesting period. For the fiscal years ended June 30, 2020, 2019 and 2018, we recorded expense of approximately $42.0 million, $41.7 million and $34.2 million, respectively, in connection with our share-based payment awards. For the fiscal years ended June 30, 2020, 2019 and 2018, we recognized tax benefits of $1.9 million, $2.4 million and $1.7 million, respectively, related to the expense recorded in connection with our share-based payment awards.

Share-Based Compensation Plans

Employee Stock Purchase Plan

On November 16, 2000, we adopted the 2000 Employee Stock Purchase Plan, which was amended on November 18, 2004 and November 18, 2010, and which provides for the issuance of up to a total of 4,000,000 shares of common stock to participating employees. At the end of each designated purchase period, which occurs every six months on March 31 and September 30, employees can elect to purchase shares of our common stock with contributions of between 1% and 10% of their base pay, accumulated via payroll deductions, at an amount equal to 85% of the lower of the fair market value of the common stock on the first day of each 24 month offering period or the last day of the applicable six-month purchase period.

Our employee stock purchase plan has several complex features that make determining fair value on the grant date impracticable. Accordingly, we measure the fair value of these awards at intrinsic value (the value of our common stock less the employee purchase price) at the end of each reporting period. For the fiscal year ended June 30, 2020, we recorded compensation cost of approximately $1.3 million associated with our employee stock purchase plan. As a result of employee stock purchases in fiscal year 2020 we issued approximately 123,000 shares of our common stock. The aggregate intrinsic value of shares issued under the

employee stock plan during fiscal year 2020 was $0.7 million. At June 30, 2020, based on employee withholdings and our common stock price at that date, approximately 39,000 shares of common stock, with an approximate intrinsic value of $0.9 million would have been eligible for issuance were June 30, 2020 to have been a designated stock purchase date.

Stock Incentive Plans

2009 Stock Incentive Plan

On November 19, 2009, we adopted the 2009 Stock Incentive Plan (the 2009 Plan), which provides for the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units and other share-based awards. Stock option awards under this plan have a 10-year maximum contractual term and must be issued at an exercise price of not less than 100% of the fair market value of the common stock at the date of grant. The 2009 Plan is administered by the Board of Directors, which has the authority to determine to whom options and other equity awards may be granted, the period of exercise and what other restrictions, if any, should apply. Vesting for awards granted to date under the 2009 Plan is principally over four years from the date of the grant, with 25% of the award vesting after one year and 6.25% of the award vesting each quarter thereafter.

We initially reserved 2,750,000 shares of our common stock for issuance under the 2009 Plan, plus additional shares equal to the number of shares subject to outstanding awards under our prior plans which expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by us. Through November 21, 2019, 14,950,000 shares of common stock had been authorized for issuance under the 2009 Plan. No further shares will be authorized for issuance under the 2009 Plan as we adopted the 2019 Stock Incentive Plan in November 2019, as noted below.

2019 Stock Incentive Plan

On November 21, 2019, we adopted the 2019 Stock Incentive Plan (the 2019 Plan), which provides for the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units and other share-based awards. Stock option awards under this plan have a 10-year maximum contractual term and must be issued at an exercise price of not less than 100% of the fair market value of the common stock at the date of grant. The 2019 Plan is administered by the Board of Directors, which has the authority to determine to whom options and other equity awards may be granted, the period of exercise and what other restrictions, if any, should apply. Vesting for awards granted to date under the 2019 Plan is principally over four years from the date of the grant, with 25% of the award vesting after one year and 6.25% of the award vesting each quarter thereafter.

We initially reserved 1,000,000 shares of our common stock for issuance under the 2019 Plan, plus additional shares equal to the number of shares subject to outstanding awards under our prior plans which expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by us. To date under the 2019 Plan, 1,000,000 shares of common stock have been authorized for issuance.

2018 Israeli Special Purpose Stock Incentive Plan

On November 15, 2018, we adopted the 2018 Israeli Special Purpose Stock Incentive Plan (the Israeli Plan), which provides for the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units and other share-based awards. Stock option awards under this plan have a 10-year maximum contractual term and must be issued at an exercise price of not less than 100% of the fair market value of the common stock at the date of grant. The Israeli Plan is administered by the Board of Directors, which has the authority to determine to whom options and other equity awards may be granted, the period of exercise and what other restrictions, if any, should apply. Vesting for awards granted to date under the Israeli Plan is principally over five years from the date of the grant, with 20% of the award vesting after one year and 5% of the award vesting each quarter thereafter.

We reserved 200,000 shares of common stock for issuance under the Israeli Plan.

Valuation and Related Activity

Restricted stock awards are valued based on the closing price of our common stock on the award grant date. There were no stock option grants during the fiscal years ended June 30, 2020, 2019 or 2018.

A summary of stock option and restricted stock activity for the fiscal year ended June 30, 2020 is as follows; in respect of shares available for grant, the shares are available for issuance by us as either a stock option or as a restricted stock award:


		Non-vested Stock				Stock Options
	Shares Available for Grant	Number of Shares	Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
	(in thousands, except per share data)
Awards outstanding at June 30, 2019	4,503	2,366	$	41.72	14	$	12.20	0.7	$	481
Plan amendment	—
Plan adoption	1,000
Awards granted ⁽¹⁾	(1,347)	1,054	44.88
Shares vested		(1,085)	39.10
Stock options exercised		—			(13)	12.70
Awards forfeited ⁽¹⁾	158	(123)	45.86
Awards expired					—	—
Awards outstanding at June 30, 2020	4,314	2,212	$	44.25	1	$	6.89	3.0	$	49
Stock options exercisable at June 30, 2020					1	$	6.89	3.0	$	49

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⁽¹⁾ Our stock plans have fungible share pools in which restricted stock awards are counted against the plan (or replenished within the plan, in respect of award forfeitures) as 1.28 shares for each one share of common stock subject to such restricted stock award.

The total intrinsic value of stock options exercised during the fiscal years ended June 30, 2020, 2019 and 2018 was approximately $0.4 million, $1.9 million and $1.9 million, respectively. There were no stock options that vested during the fiscal years ended June 30, 2020, 2019 or 2018.

The majority of our restricted stock awards vest over a four year period as described above; however, certain awards vest over either a two or five year period and restricted stock awards granted to our non-employee directors upon his or her election to the Board of Directors and annually thereafter vest after a one year period. The weighted average grant date fair value for restricted stock awards granted during the fiscal years ended June 30, 2020, 2019 and 2018 was $44.88, $52.45 and $32.78, respectively. The total fair value of restricted stock awards that vested during the fiscal years ended June 30, 2020, 2019 and 2018 was approximately $51.0 million, $63.6 million and $37.5 million, respectively. We recorded expense of approximately $40.7 million associated with our restricted stock awards for the fiscal year ended June 30, 2020. As of June 30, 2020, there was approximately $87.0 million of unrecognized compensation cost related to restricted stock awards that will be recognized as expense over a weighted average period of 2.9 years. Excluding the impact of shares issued as purchase consideration with forfeiture provisions, approximately 1.1 million shares of restricted stock awards vested during the fiscal year ended June 30, 2020.

Stock Issued in Acquisitions

Retention of key personnel in businesses we acquire is critical to us because it helps to ensure that we maximize the value of companies we acquire, which we believe is vitally important to our stockholders. Accordingly, in order to maximize the retention of key employees, we commonly attach forfeiture provisions to the shares we issue to acquire certain businesses. This has the effect of requiring key employees to stay in our employment, post-acquisition, in order to earn the full value of the stock we issue. These shares are issued as purchase consideration, but as a result of the forfeiture provisions we attach they are categorized as compensatory awards under U.S. GAAP. The forfeiture provisions on these shares typically lapse over a four or five year period.

Activity associated with shares issued as purchase consideration with forfeiture provisions for the fiscal year ended June 30, 2020 is reflected in the table below. These shares were not issued out of our shareholder approved stock plans and do not represent grants or awards of shares from those plans.


	Non-vested Stock
	Number of Shares (in thousands)	Weighted Average Grant Date Fair Value
Purchase consideration shares with forfeiture provisions outstanding at June 30, 2019	99	$	30.97
Issuance of purchase consideration shares with forfeiture provisions	—	—
Lapse of forfeiture provisions	(54)	22.70
Shares forfeited	(43)	41.20
Purchase consideration shares with forfeiture provisions outstanding at June 30, 2020	2	$	32.76