Stockholders' Equity

12 Months Ended

Jun. 30, 2012

Stockholders' Equity [Abstract]

Stockholders' Equity

(11) Stockholders' Equity

Common Stock. On August 24, 2011, our board of directors approved a new share repurchase program, authorizing us to acquire up to an aggregate of 20.0 million shares of ResMed Inc. 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. This program canceled and replaced our previous share repurchase program authorized on May 27, 2009 pursuant to which we had repurchased 10.0 million shares. These were in addition to the 6.6 million shares repurchased under an earlier program authorized on June 6, 2002. The new program authorizes us to purchase in addition to the shares we repurchased under our previous programs. There is no expiration date for this program. All share repurchases since August 24, 2011 have been executed in accordance with this program.

During the fiscal years 2012 and 2011, we repurchased 13.6 million and 4.9 million shares, respectively, at a cost of $391.2 million and $160.1 million, respectively. At June 30, 2012, we have repurchased a total of 27.7 million shares at a cost of $895.8 million. 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, 2012, 8.8 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, 2012.

Stock Options and Restricted Stock Units. We have granted stock options and restricted stock units to personnel, including officers and directors, in accordance with the ResMed Inc. 2009 Incentive Award Plan (the "2009 Plan"). These options and restricted stock units have expiration dates of seven years from the date of grant and vest over one or four years. We have granted the options with an exercise price equal to the market value as determined at the date of grant.

The maximum number of shares of our common stock authorized for issuance under the 2009 Plan is 35,475,000. The number of securities remaining available for future issuance under the 2009 Plan at June 30, 2012 is 14,538,216. The number of shares of our common stock available for issuance under the 2009 Plan will be reduced by (i) two 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).

At June 30, 2012, there were $64.1 million in unrecognized compensation costs related to unvested stock-based compensation arrangements. This is expected to be recognized over a weighted average period of 2.7 years. The aggregate intrinsic value of the stock-based compensation arrangements outstanding and exercisable at June 30, 2012 was $169.0 million and $81.6 million, respectively. The aggregate intrinsic value of the options exercised during the fiscal years 2012, 2011 and 2010 was $45.3 million, $66.4 million and $65.3 million, respectively.

The following table summarizes option activity during the year ended June 30, 2012:

					Weighted Average	Weighted Average
		Options			Exercise Price	Remaining Term to Vest in Years
Outstanding at beginning of period		12,230,684		$	19.24	3.8 years
Granted		791,265			27.89
Exercised		(3,271,429	)		17.23
Forfeited		(386,800	)		22.97
Outstanding at end of period		9,363,720		$	20.52	3.3 years
Exercise price range of granted options	$	27.58- $31.07
Options exercisable at end of period		6,609,812		$	18.90

The following table summarizes the activity of restricted stock units during year ended June 30, 2012:

	Restricted Stock			Weighted Average	Weighted Average Remaining
	Units			Grant-Date Fair Value	Term to Vest in Years
Outstanding at beginning of period	1,635,686		$	30.16	1.73 years
Granted	1,220,335			28.08
Vested*	(438,743	)		29.80
Forfeited	(256,405	)		29.63
Outstanding at end of period	2,160,873		$	29.13	1.60 years

* Includes 109,867 shares netted for tax

The ESPP was approved at the annual meeting of our stockholders on November 18, 2009, as an amendment to the previously approved employee stock purchase plan. 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, 2012, the number of shares remaining available for future issuance under the ESPP is 407,000.

During fiscal years 2012 and 2011, we issued 369,000 and 305,000 shares to our employees in two offerings and we recognized $2.8 million and $2.4 million, respectively, of stock compensation expense associated with the ESPP.

The following table summarizes the total stock-based compensation costs incurred and the associated tax benefit recognized during the year ended June 30, 2012, 2011 and 2010 (in thousands):

		2012			2011			2010
Cost of sales - capitalized as part of inventory	$	1,749		$	1,496		$	1,354
Selling, general and administrative expenses		25,201			26,163			25,682
Research and development expenses		3,636			3,150			2,698
Stock-based compensation costs		30,586			30,809			29,734
Tax benefit		(8,421	)		(9,474	)		(8,985	)
Stock-based compensation costs, net of tax
benefit	$	22,165		$	21,335		$	20,749