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Share-based compensation
 9 Months Ended
Mar. 25, 2022
Share-based Payment Arrangement [Abstract]  
Share-based compensation Share-based compensation
Share-based compensation
The grant date fair value of restricted share units and performance share units is based on the market value of the Company's ordinary shares on the date of grant.
The effect of recording share-based compensation expense for the three and nine months ended March 25, 2022 and March 26, 2021 was as follows:
 Three Months EndedNine Months Ended
(amount in thousands)March 25,
2022		March 26,
2021		March 25,
2022		March 26,
2021
Share-based compensation expense by type of award:  
Restricted share units$3,126 $3,953 $11,720 $13,377 
Performance share units2,597 2,911 9,981 5,365 
Total share-based compensation expense5,723 6,864 21,701 18,742 
Tax effect on share-based compensation expense— — — — 
Net effect on share-based compensation expense$5,723 $6,864 $21,701 $18,742 
Share-based compensation expense was recorded in the unaudited condensed consolidated statements of operations and comprehensive income as follows:
 Three Months EndedNine Months Ended
(amount in thousands)March 25,
2022		March 26,
2021		March 25,
2022		March 26,
2021
Cost of revenue$1,183 $1,388 $4,579 $4,805 
Selling, general and administrative expense4,540 5,476 17,122 13,937 
Total share-based compensation expense$5,723 $6,864 $21,701 $18,742 
The Company did not capitalize any share-based compensation expense as part of any asset costs during the three and nine months ended March 25, 2022 and March 26, 2021.
Share-based award activity
On December 12, 2019, the Company’s shareholders approved Fabrinet’s 2020 Equity Incentive Plan (the “2020 Plan”). Upon the approval of the 2020 Plan, Fabrinet’s Amended and Restated 2010 Performance Incentive Plan (the “2010 Plan”) was simultaneously terminated. The 2020 Plan provides for the grant of equity awards thereunder with respect to (i) 1,700,000 ordinary shares, plus (ii) up to 1,300,000 ordinary shares that, as of immediately prior to the termination of the 2010 Plan, had been reserved but not issued pursuant to any awards granted under the 2010 Plan and are not subject to any awards thereunder. Upon termination of the 2010 Plan, 1,281,619 ordinary shares were reserved for issuance under the 2020 Plan pursuant to clause (ii) of the preceding sentence.
As of March 25, 2022, there were 299,009 restricted share units outstanding, 285,882 performance share units outstanding and 2,231,558 ordinary shares available for future grant under the 2020 Plan.
As of March 25, 2022, there were 149,755 restricted share units outstanding under the 2010 Plan. No ordinary shares are available for future grant under the 2010 Plan.
On November 2, 2017, the Company adopted the 2017 Inducement Equity Incentive Plan (the “2017 Inducement Plan”) with a reserve of 160,000 ordinary shares authorized for future issuance solely for the granting of inducement share options and equity awards to new employees. The 2017 Inducement Plan was adopted without shareholder approval in reliance on the “employment inducement exemption” provided under the New York Stock Exchange Listed Company Manual. As of March 25, 2022, there were 12,164 restricted share units outstanding and 111,347 ordinary shares available for future grant under the 2017 Inducement Plan.
The 2020 Plan, 2010 Plan and 2017 Inducement Plan are collectively referred to as the “Equity Incentive Plans.”
Restricted share units and performance share units
Restricted share units and performance share units have been granted under the Equity Incentive Plans.
Restricted share units granted to employees generally vest in equal installments over three or four years on each anniversary of the vesting commencement date. Restricted share units granted to non-employee directors generally cliff vest 100% on the first of January, approximately one year from the grant date, provided the director continues to serve through such date.
Performance share units granted to executives will vest, if at all, at the end of a two-year performance period based on the Company’s achievement of pre-defined performance criteria, which consist of revenue and non-GAAP operating margin targets. The actual number of performance share units that may vest at the end of the performance period ranges from 0% to 100% of the award grant.
The following table summarizes restricted share unit activity under the Equity Incentive Plans:
 Number
of
Shares		Weighted-
Average Grant
Date Fair Value
Per Share
Balance as of June 25, 2021
641,875 $55.74 
Granted165,684 $102.74 
Issued(310,473)$52.12 
Forfeited(36,158)$69.84 
Balance as of March 25, 2022
460,928 $73.96 
 Number
of
Shares		Weighted-
Average Grant
Date Fair Value
Per Share
Balance as of June 26, 2020797,757 $46.88 
Granted222,886 $69.97 
Issued(347,662)$45.18 
Forfeited(23,432)$57.71 
Balance as of March 26, 2021
649,549 $55.33 
The following table summarizes performance share unit activity under the Equity Incentive Plans:
 Number
of
Shares		Weighted-
Average Grant
Date Fair Value
Per Share
Balance as of June 25, 2021
427,028 $57.82 
Granted110,832 $101.05 
Issued(190,213)$48.65 
Forfeited(61,765)$53.38 
Balance as of March 25, 2022
285,882 $81.64 
 Number
of
Shares		Weighted-
Average Grant
Date Fair Value
Per Share
Balance as of June 26, 2020440,140 $48.37 
Granted184,718 $69.85 
Issued(82,185)48.02 
Forfeited(115,645)$48.02 
Balance as of March 26, 2021
427,028 $57.82 
The fair value of restricted share units and performance share units is based on the market value of the Company's ordinary shares on the date of grant.
As of March 25, 2022, there was $13.6 million and $9.3 million of unrecognized share-based compensation expense related to restricted share units and performance share units, respectively, under the Equity Incentive Plans that is expected to be recorded over a weighted-average period of 2.4 and 1.1 years, respectively.
For the nine months ended March 25, 2022 and March 26, 2021, the Company withheld an aggregate of 210,006 shares and 160,648 shares, respectively, upon the vesting of restricted share units, based upon the closing share price on the vesting date to settle employee tax withholding obligations. For the nine months ended March 25, 2022 and March 26, 2021, the Company then remitted cash of $20.4 million and $11.4 million, respectively, to the appropriate taxing authorities and presented it as a financing activity within the unaudited condensed consolidated statements of cash flows. The payment was recorded as a reduction of additional paid-in capital.