Common Stock. On February 21, 2014, our board of directors approved a new share repurchase program, authorizing us to acquire up to an aggregate of 20.0 million shares of our common stock. The program allows us to repurchase shares of our common stock from time to time for cash in the open market, or in negotiated or block transactions, as market and business conditions warrant and subject to applicable legal requirements. The 20.0 million shares the new program authorizes us to purchase are in addition to the shares we repurchased on or before February 21, 2014 under our previous programs. There is no expiration date for this program, and the program may be accelerated, suspended, delayed or discontinued at any time at the discretion of our board of directors. All share repurchases since February 21, 2014 have been executed in accordance with this program.

We have temporarily suspended our repurchase program and, accordingly, did not repurchase any shares during fiscal years 2021 or 2020. As of June 30, 2021, we have repurchased a total of 41.8 million shares at a cost of $1.6 billion. Shares that are repurchased are classified as “treasury stock pending future use” and reduce the number of shares outstanding used in calculating earnings per share. At June 30, 2021, 12.9 million additional shares can be repurchased under the approved share repurchase program.

Preferred Stock. In April 1997, our board of directors authorized 2,000,000 shares of $0.01 par value preferred stock. No such shares were issued or outstanding at June 30, 2021.

Stock Options and Restricted Stock Units. We have granted stock options, restricted stock units (“RSUs”) and performance restricted stock units (“PRSUs”) to personnel, including officers and directors, in accordance with the ResMed Inc. 2009 Incentive Award Plan (the “2009 Plan”). Options and restricted stock units vest over one year to four years and the options have expiration dates of seven years from the date of grant. We have granted the options with an exercise price equal to the market value as determined at the date of grant. We have granted PRSUs that are subject to a market condition, with the ultimate realizable number of PRSUs dependent on relative total stockholder return over a period of three years, up to a maximum amount to be issued under the award of 225% of the original grant.

At the annual meeting of our stockholders in November 2017, our stockholders approved an amendment and restatement to the 2009 Plan to increase the number of shares of common stock that may be issued or transferred pursuant to awards under the 2009 Plan by 7.4 million. The amendment and restatement imposes a maximum award amount which may be granted under the 2009 Plan to non-employee director in a calendar year, which when taken together with any other cash fees earned for services as a non-employee director during the calendar year, has a total value of $0.7 million, or $1.2 million in the case of a non-employee director who is also serving as chairman of our board of directors. The amendment and restatement also increased the maximum amount payable pursuant to cash-denominated performance awards granted in any calendar year from $3.0 million to $5.0 million. In addition, the amendment and restatement extended the existing prohibition on the payment of dividends or dividend equivalents on unvested awards to apply to all awards, including time-based restricted stock, deferred stock and stock payment. The term of the 2009 Plan was extended by four years so that the plan expires on September 11, 2027.

The maximum number of shares of our common stock authorized for issuance under the 2009 Plan is 51.1 million. The number of securities remaining available for future issuance under the 2009 Plan at June 30, 2021 is 15.5 million. The number of shares of our common stock available for issuance under the 2009 Plan will be reduced by (i) 2.8 shares for each one share of common stock delivered in settlement of any “full-value award,” which is any award other than a stock option, stock appreciation right or other award for which the holder pays the intrinsic value and (ii) one share for each share of common stock delivered in settlement of all other awards. The maximum number of shares, which may be subject to awards granted under the 2009 Plan to any individual during any calendar year, may not exceed 3 million shares of our common stock (except in a participant’s initial year of hiring up to 4.5 million shares of our common stock may be granted).

In certain regions, shares are withheld on behalf of employees to satisfy statutory tax withholding requirements upon exercise or vesting of awards. The number of shares withheld is based upon the closing price of our common stock on the trading day of the applicable settlement date. The remaining shares are delivered to the recipient as shares of our common stock. The amount remitted to the tax authorities for the employees’ tax obligation is reflected as a financing activity on our consolidated statements of cash flows. Shares withheld by us as a result of the net settlement are not considered issued and outstanding and are added to the reserves of the 2009 Plan.

The total fair value of RSUs and PRSUs that vested during the years ended June 30, 2021, 2020 and 2019, was $59.6 million, $56.8 million and $52.3 million, respectively.

The following table summarizes the activity of RSUs, including PRSUs, during year ended June 30, 2021 (in thousands, except years and per share amounts):



	Restricted ‎Stock ‎Units		Weighted ‎Average ‎Grant-Date ‎Fair Value		Weighted ‎Average ‎Remaining ‎Contractual ‎Term in Years
Outstanding at beginning of period		1,132	$	103.77	1.6
Granted		277		209.02
Vested*		(704)		84.87
Performance factor adjustment		209		-
Expired / cancelled		(34)		119.64
Forfeited		(5)		119.64
Outstanding at end of period		875	$	145.19	1.5

* Includes 235 thousand shares netted for tax.

The following table summarizes option activity during the year ended June 30, 2021 (in thousands, except years and per share amounts):


	Options		Weighted ‎Average ‎Exercise ‎Price		Weighted ‎Average ‎Remaining ‎Contractual ‎Term in Years
Outstanding at beginning of period		1,068	$	89.05	4.4
Granted		56		210.18
Exercised		(64)		62.05
Forfeited		-		-
Outstanding at end of period		1,060	$	97.01	3.7
Options exercisable at end of period		804	$	82.11	3.2
Options vested and expected to vest at end of period		1,050	$	96.37	3.7

The aggregate intrinsic value of options exercised during the fiscal years 2021, 2020 and 2019, was $8.9 million, $31.2 million and $15.1 million, respectively. As at June 30, 2021, the aggregate intrinsic value of options outstanding, exercisable, and vested and expected to vest were $158.5 million, $132.1 million and $157.6 million respectively.

Employee Stock Purchase Plan (the “ESPP”). Under the ESPP, we offer participants the right to purchase shares of our common stock at a discount during successive offering periods. Each offering period under the ESPP will be for a period of time determined by the board of directors’ compensation committee of no less than 3 months and no more than 27 months. The purchase price for our common stock under the ESPP will be the lower of 85% of the fair market value of our common stock on the date of grant or 85% of the fair market value of our common stock on the date of purchase. An individual participant cannot subscribe for more than $25,000 in common stock during any calendar year. At June 30, 2021, the number of shares remaining available for future issuance under the ESPP is 1.8 million shares.

During years ended June 30, 2021, 2020 and 2019, we issued 229,000, 265,000 and 285,000 shares to our employees in two offerings and we recognized $10.9 million, $8.0 million and $6.4 million, respectively, of stock compensation expense associated with the ESPP.

Stock–based Employee compensation. We measure the compensation expense of all stock-based awards at fair value on the grant date. We estimate the fair value of stock options and purchase rights granted under the ESPP using the Black-Scholes valuation model. The fair value of restricted stock units is equal to the market value of the underlying shares as determined at the grant date less the fair value of dividends that holders are not entitled to, during the vesting period. The fair value of performance restricted stock units is measured using a Monte-Carlo simulation valuation model. We recognize the fair value as compensation expense using the straight-line method over the service period for awards expected to vest.

We estimate the fair value of stock options granted under our stock option plans and purchase rights granted under the ESPP using the assumptions in the following tables. The risk-free interest rate is estimated using the U.S. Treasury yield curve and is based on the term of the award. The expected term of awards is estimated from the vesting period of the award, as well as historical exercise behavior, and represents the period of time the awards granted are expected to be outstanding. Expected volatility is estimated based upon the historical volatility of ResMed stock.

We estimate the fair value of stock options granted under our stock option plans and purchase rights granted under the ESPP using the


	2021		2020		2019
Stock options:
Weighted average grant date fair value	$	53.67	$	32.14	$	21.92
Weighted average risk-free interest rate		0.37%		1.58%		2.96%
Expected life in years		4.9		4.9		4.9
Dividend yield		0.75%		1.07%		1.34% - 1.46%
Expected volatility		31%		25%		23%

ESPP purchase rights:
Weighted average grant date fair value	$	48.18	$	31.82	$	22.12
Weighted average risk-free interest rate		0.1%		1.6%		2.4%
Expected life in years		6 months		6 months		6 months
Dividend yield		0.79% - 0.98%		0.98% - 1.42%		1.40% - 1.47%
Expected volatility		30% - 60%		23% - 60%		23%

The following table summarizes the total stock-based compensation costs incurred and the associated tax benefit recognized during the years ended June 30, 2021, 2020 and 2019 (in thousands):


	2021		2020		2019
Cost of sales	$	4,153	$	3,703	$	3,043
Selling, general and administrative expenses		51,727		47,265		42,700
Research and development expenses		8,047		6,591		6,330
Stock-based compensation costs		63,927		57,559		52,073
Tax benefit		(23,346)		(39,534)		(26,658)
Stock-based compensation costs, net of tax benefit	$	40,581	$	18,025	$	25,415

At June 30, 2021, there was $94.3 million in unrecognized compensation costs related to unvested stock-based compensation arrangements. This is expected to be recognized over a weighted average period of 2.2 years.