Stockholder's Equity

3 Months Ended

Sep. 30, 2022

Stockholders’ Equity

Common Stock

As discussed in Note 1, “Description of Business,” the Company completed the U.S. Domestication after the close of market trading on September 30, 2022. At that time all issued and outstanding ordinary shares of Atlassian Corporation Plc were exchanged on a one-for-one basis for newly issued shares of corresponding common stock of Atlassian Corporation, and all issued and outstanding equity awards of Atlassian Corporation Plc were assumed by Atlassian Corporation and were converted into rights to acquire Atlassian Corporation shares of Class A Common Stock on the same terms.

As of September 30, 2022, the Company’s common stock consists of Class A and Class B Common Stock, which have a par value of $0.00001. Each share of Class B Common Stock will convert automatically into one share of Class A Common Stock in the following circumstances: (1) upon the written consent of the holders of at least 66.66% of the total number of outstanding shares of Class B Common Stock; (2) if the aggregate number of shares of Class B Common Stock then outstanding comprises less than ten percent (10%) of the total number of shares of Class A Common Stock and Class B Common Stock then outstanding; and (3) upon any transfer to a person that is not a permitted transferee described in the Company’s amended and restated certificate of incorporation.

Any dividend declared by the Company shall be paid on the Class A Common Stock and the Class B Common Stock pari passu as if they were all stock of the same class. Additionally, upon the liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary, holders of Class A Common Stock and Class B Common Stock will be entitled to receive ratably on a per share basis all assets of the Company available for distribution to its stockholders, unless disparate or different treatment of the shares of each such class is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A Common Stock and by the affirmative vote of the holders of a majority of the outstanding shares of Class B Common Stock, each voting separately as a class.

Each share of Class A Common Stock is entitled to one vote. Each share of Class B Common Stock is entitled to 10 votes.

Preferred Stock

The Company’s board of directors has the authority to issue up to 10,000,000 shares of preferred stock in one or more series. The Company’s board of directors may designate the rights, preferences, privileges and restrictions of the preferred stock, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, the right to elect directors to and increase or decrease the number of shares of any series. As of September 30, 2022 and June 30, 2022, no shares of preferred stock were outstanding.

Stock-based Compensation

Upon the completion of the U.S. Domestication, the Company assumed the following plans: the Atlassian Corporation Plc 2015 Share Incentive Plan (the “2015 Plan”); the Atlassian Corporation Plc 2013 U.S. Share Option Plan (the “2013 U.S. Option Plan”) and the 2015 Employee Share Purchase Plan (the “ESPP” and, together with the 2015 Plan, the 2013 U.S. Option Plan and the ESPP, the “Incentive Plans”). The Atlassian UK Employee Share Option Plan was not assumed by the Company as there were no stock option awards outstanding at the time of the U.S. Domestication. In connection with its assumption of the Incentive Plans, the Company amended and restated the 2015 Plan as the Atlassian Corporation Amended and Restated 2015 Share Incentive Plan, the ESPP as the Atlassian Corporation Amended and Restated 2015 Employee Share Purchase Plan and the 2013 U.S. Option Plan as the Atlassian Corporation Amended and Restated 2013 U.S. Share Option Plan, in each case to reflect the assumption and changes in applicable law and to provide that the securities to be issuable in connection with equity awards will be shares of the Company’s Class A Common Stock instead of Atlassian Corporation Plc Class A ordinary shares.

In addition, the Company assumed each option to purchase Atlassian Corporation Plc Class A ordinary shares and each restricted share unit award covering Atlassian Corporation Plc Class A ordinary shares that was outstanding under an equity incentive plan and amended such option or restricted share unit award to reflect the assumption by the Company and to provide for the securities issuable in connection with the exercise or settlement of the option or award to be shares of the Company’s Class A Common Stock.

At September 30, 2022, the Company had 33,095,977 shares of its common stock available for future issuance under the 2015 Plan, which plan provides for the issuance of incentive and non-statutory share options, share appreciation rights, restricted stock awards, RSUs, unrestricted stock awards, cash-based awards, performance share awards, performance-based awards to covered employees, and dividend equivalent rights to qualified employees, directors and consultants. The Company currently does not have common stock outstanding or open offering periods under the ESPP.

RSU grants generally vest over four years with 25% vesting on the one year anniversary of the date of grant and 1/12th of the remaining RSUs vesting over the remaining three years, on a quarterly basis. Effective from April 2021, new RSU grants to existing employees vest evenly over four years on a quarterly basis. Performance-based RSUs have non-market performance vesting conditions. Individuals must continue to provide services to the Company in order to vest.

The 2013 U.S. Option Plan allowed for the issuance of options to purchase restricted shares. Effective upon the Company’s IPO, the shares underlying the options converted to Class A ordinary shares, and subsequently, following the U.S. Domestication, converted to Class A Common Stock. Although no future awards will be granted under the Option Plans, they will continue to govern outstanding awards granted thereunder.

All stock-based compensation are measured based on the grant date fair value of the awards and recognized in the condensed consolidated statements of operations over the period during which the employee is required to perform services in exchange for the award (generally the four-year vesting period of the award, with the exception of restricted stock).

A summary of RSU activity was as follows:


	Number of Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Life (Years)	Aggregate Intrinsic Value (in thousands)












Balance as of June 30, 2022	6,023,997	$	257.62	3	$	1,128,897
Granted	5,289,877	257.40
Vested	(578,285)	222.15			$	163,869
Forfeited or cancelled	(307,506)	274.69
Balance as of September 30, 2022	10,428,083	$	258.97	3	$	2,196,050

As of September 30, 2022, total compensation cost not yet recognized in the condensed consolidated financial statements related to employee and director RSU awards was $2.0 billion, which is expected to be recognized over a weighted-average period of 1.9 years.

During the three months ended September 30, 2022 and 2021, the Company did not grant shares of restricted stock. As of September 30, 2022 and June 30, 2022, there were 41,050 and 72,484 shares of restricted stock outstanding, respectively. These outstanding shares of restricted stock are subject to forfeiture or repurchase at the original exercise price during the repurchase period following employee termination, as applicable. The total aggregate intrinsic value of outstanding shares of restricted stock were $8.7 million and $13.6 million as of September 30, 2022 and June 30, 2022, respectively.

During the three months ended September 30, 2022 and 2021, the Company did not grant any Class A Common Stock under the Option Plans. As of September 30, 2022, a total of 9,349 options were outstanding which are exercisable over a weighted average remaining life of 3 years. There was no unrecognized compensation cost associated with the Company’s outstanding stock options.

Of the total stock-based compensation expense, costs recognized for awards granted to non-employees were immaterial for all periods presented.