Quarterly report pursuant to Section 13 or 15(d)

Equity, Long-Term Incentive Compensation Plans and Non-controlling Interest (Tables)

v3.19.1
Equity, Long-Term Incentive Compensation Plans and Non-controlling Interest (Tables)
9 Months Ended
Mar. 31, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Schedule of Combined Activity Under Equity Incentive Plans
The following table summarizes the combined activity under our equity incentive plans:
(In thousands)
Available
 For Grant(1) (5)
Balance as of June 30, 2018
3,680

Plan shares increased
12,000

Restricted stock units granted (2)(3)
(2,209
)
Restricted stock units granted adjustment (4)
5

Restricted stock units canceled
20

Plan shares expired (1998 Director Plan)
(1,660
)
Balance as of March 31, 2019
11,836

__________________ 
(1)
The number of RSUs reflects the application of the award multiplier (1.8x or 2.0x depending on the grant date of the applicable award).
(2)
Includes RSUs granted to senior management during the nine months ended March 31, 2019 with performance-based vesting criteria (in addition to service-based vesting criteria for any of such RSUs that are deemed to have been earned) (“performance-based RSUs”). As of March 31, 2019, it had not yet been determined the extent to which (if at all) the performance-based vesting criteria had been satisfied. Therefore, this line item includes all such performance-based RSUs granted during the nine months ended March 31, 2019, reported at the maximum possible number of shares that may ultimately be issuable if all applicable performance-based criteria are achieved at their maximum levels and all applicable service-based criteria are fully satisfied (0.7 million shares for the nine months ended March 31, 2019 reflects the application of the multiplier described above).
(3)
Includes RSUs granted to executive management during the three months ended March 31, 2019 with both a market condition and a service condition (“market-based RSUs”). Under the award agreements, the vesting of the market-based RSUs is contingent on achieving total stockholder return (including stock price appreciation and cash dividends) objectives on a per share basis of equal to or greater than 150%, 175% and 200% multiplied by the measurement price of $116.39 during the five-year period ending March 20, 2024. The awards are split into three tranches and, to the extent that total stockholder return targets have been met, one-third of the maximum number of shares available under these awards will vest on each of the third, fourth, and fifth anniversaries of the grant date. This line item includes all such market-based RSUs granted during the three months ended March 31, 2019 reported at the maximum possible number of shares that may ultimately be issuable if all applicable market-based criteria are met at their maximum levels and all applicable service-based criteria are fully satisfied (0.5 million shares for the nine months ended March 31, 2019 reflects the application of the multiplier described above).
(4)
Represents the portion of RSUs granted with performance-based vesting criteria and reported at the actual number of shares issued upon achievement of the performance vesting criteria during the nine months ended March 31, 2019.
(5)
No additional stock options, RSUs or other awards will be granted under the Assumed Equity Plans.
Schedule of Stock-based Compensation Expense
The following table shows stock-based compensation expense for the indicated periods: 
 
Three months ended
March 31,
 
Nine months ended
March 31,
(In thousands)
2019 (1)
 
2018
 
2019
 
2018
Stock-based compensation expense by:
 
 
 
 
 
 
 
Costs of revenues
$
3,105

 
$
2,386

 
$
6,759

 
$
5,458

Research and development
4,986

 
3,185

 
9,988

 
7,631

Selling, general and administrative
26,102

 
10,639

 
49,279

 
30,891

Total stock-based compensation expense
$
34,193

 
$
16,210

 
$
66,026

 
$
43,980


__________________
(1)
Includes $10.9 million of stock-based compensation expense acceleration for certain equity awards for Orbotech employees.
Schedule of Stock-based Compensation Capitalized as Inventory
The following table shows stock-based compensation capitalized as inventory as of the dates indicated below: 
(In thousands)
As of
March 31, 2019
 
As of
June 30, 2018
Inventory
$
4,943

 
$
4,580

Schedule of Restricted Stock Activity
The following table shows the activity and weighted-average grant date fair value for RSUs during the nine months ended March 31, 2019:
 
Shares(1)
(In thousands)
 
Weighted-Average
Grant Date
Fair Value
Outstanding restricted stock units as of June 30, 2018(2)
2,014

 
$
76.50

Granted(2)
1,104

 
$
103.59

Granted adjustments(3)
(2
)
 
$
50.88

Assumed upon Orbotech Acquisition(4)
519

 
$
104.49

Vested and released
(409
)
 
$
68.73

Withheld for taxes
(285
)
 
$
68.73

Forfeited
(10
)
 
$
81.55

Outstanding restricted stock units as of March 31, 2019(2)
2,931

 
$
93.46

__________________ 
(1)
Share numbers reflect actual shares subject to awarded RSUs. Under the terms of the 2004 Plan, the number of shares subject to each award reflected in this number is multiplied by either 1.8x or 2.0x (depending on the grant date of the award) to calculate the impact of the award on the share reserve under the 2004 Plan.
(2)
Includes performance-based and market-based RSUs. As of March 31, 2019, it had not yet been determined the extent to which (if at all) the performance-based or market-based vesting criteria had been satisfied. Therefore, this line item includes all such RSUs reported at the maximum possible number of shares (42 thousand shares for the fiscal year ended June 30, 2017, 0.2 million shares for the fiscal year ended June 30, 2018 and 0.6 million shares for the nine months ended March 31, 2019) that may ultimately be issuable if all applicable performance-based and market-based criteria are achieved at their maximum and all applicable service-based criteria are fully satisfied.
(3)
Represents the portion of RSUs granted with performance-based vesting criteria and reported at the actual number of shares issued upon achievement of the performance vesting criteria during nine months ended March 31, 2019.
(4)
Represents Assumed RSUs under the Assumed Equity Plans. Since the Assumed RSUs do not have “dividend equivalent” rights, the fair value was calculated using the closing price of our common stock on the Acquisition Date, adjusted to exclude the present value of dividends.
Schedule of Grant Date Fair Value, Weighted Average Grant Date Fair Value, and Tax Benefits for Restricted Stock Units
The following table shows the weighted-average grant date fair value per unit for the RSUs granted, vested, and tax benefits realized by us in connection with vested and released RSUs for the indicated periods:
 
Three months ended
March 31,
 
Nine months ended
March 31,
(In thousands, except for weighted-average grant date fair value)
2019
 
2018
 
2019
 
2018
Weighted-average grant date fair value per unit
$
97.60

 
$
109.80

 
$
103.59

 
$
91.84

Weighted-average fair value per unit assumed upon Orbotech Acquisition
$
104.49

 
$

 
$
104.49

 
$

Grant date fair value of vested restricted stock units
$
4,740

 
$
745

 
$
47,674

 
$
42,601

Tax benefits realized by us in connection with vested and released restricted stock units
$
170

 
$
249

 
$
10,900

 
$
16,731


Employee Stock Purchase Rights Valuation
The fair value of each purchase right under the ESPP was estimated on the date of grant using the Black-Scholes model and the straight-line attribution approach with the following weighted-average assumptions: 
 
Three months ended
March 31,
 
Nine months ended
March 31,
 
2019
 
2018
 
2019
 
2018
Stock purchase plan:
 
 
 
 
 
 
 
Expected stock price volatility
36.3
%
 
31.5
%
 
33.2
%
 
28.7
%
Risk-free interest rate
2.4
%
 
1.3
%
 
2.1
%
 
1.1
%
Dividend yield
3.3
%
 
2.4
%
 
3.1
%
 
2.5
%
Expected life (in years)
0.5

 
0.5

 
0.5

 
0.5

Schedule of Tax Benefits Realized and Weighted-average fair value for the ESPP
The following table shows the tax benefits realized by us in connection with the disqualifying dispositions of shares purchased under the ESPP and the weighted-average fair value per share for the indicated periods: 
(In thousands, except for weighted-average fair value per share)
Three months ended
March 31,
 
Nine months ended
March 31,
2019
 
2018
 
2019
 
2018
Total cash received from employees for the issuance of shares under the ESPP
$

 
$

 
$
20,556

 
$
20,579

Number of shares purchased by employees through the ESPP

 

 
270

 
264

Tax benefits realized by us in connection with the disqualifying dispositions of shares purchased under the ESPP
$
444

 
$
787

 
$
1,047

 
$
1,681

Weighted-average fair value per share based on Black-Scholes model
$
21.25

 
$
23.61

 
$
21.67

 
$
21.89