Stock-Based Compensation | 9 Months Ended |
Mar. 31, 2014 |
Stock-Based Compensation [Abstract] | ' |
Stock-Based Compensation | ' |
|
12. Stock-based compensation |
|
Stock option and restricted stock activity |
|
Options |
|
The following table summarizes stock option activity for the nine months ended March 31, 2014 and 2013: |
|
| | | | | | | | |
| | | | Weighted | | | | Weighted |
| | | Weighted | Average | | | | Average |
| | | average | Remaining | Aggregate | Grant |
| | | exercise | Contractual | Intrinsic | Date Fair |
| Number of | | price | Term | Value | Value |
| shares | | ($) | (in years) | ($' 000) | ($) |
|
Outstanding – June 30, 2013 | 2,648,583 | | 15.15 | 5.98 | | 313 | | |
Granted under Plan: August | | | | | | | | |
2013 | 224,896 | | 7.35 | 10 | | 568 | | 2.53 |
Exercised | (10,000 | ) | 8.75 | | | 12 | | |
Forfeited | (136,420 | ) | 23.51 | | | | | |
Outstanding – March 31, | | | | | | | | |
2014 | 2,727,059 | | 14.12 | 5.63 | | 2,290 | | |
|
Outstanding – June 30, 2012 | 2,247,583 | | 16.28 | 6.43 | | 602 | | |
Granted under Plan: August | | | | | | | | |
2012 | 431,000 | | 8.75 | 10 | | 1,249 | | 2.9 |
Exercised | (30,000 | ) | 7.98 | | | 24 | | |
Outstanding – March 31, | | | | | | | | |
2013 | 2,648,583 | | 15.15 | 6.74 | | 978 | | |
|
|
The fair value of each option is estimated on the date of grant using the Cox Ross Rubinstein binomial model that uses the assumptions noted in the following table. The estimated expected volatility is calculated based on the Company's 250 day volatility. The estimated expected life of the option was determined based historical behavior of employees who were granted options with similar terms. The Company has estimated no forfeitures for options awarded in August 2013 and 2014, respectively. The table below presents the range of assumptions used to value options granted during the three and nine months ended March 31, 2014 and 2013: |
|
| | | | | | | | |
| Three and nine months ended | | | | | |
| | | March 31, | | | | | |
| 2014 | | 2013 | | | | | |
Expected volatility | 50 | % | 49 | % | | | | |
Expected dividends | 0 | % | 0 | % | | | | |
Expected life (in years) | 3 | | 3 | | | | | |
Risk-free rate | 0.9 | % | 0.3 | % | | | | |
|
|
During the three and nine months ended March 31, 2014, terminated employees forfeited 136,420 stock options. There were no forfeitures during the three and nine months ended March 31, 2013. |
|
The following table presents stock options vesting and expecting to vest as of March 31, 2014: |
|
| | | | | | | | |
| | | Weighted | | | | | |
| | Weighted | Average | | | | | |
| | average | Remaining | Aggregate | | |
| | exercise | Contractual | Intrinsic | | |
| Number of | price | Term | Value | | |
| shares | ($) | (in years) | ($' 000) | | |
Vested and expecting to vest | | | | | | | | |
– March 31, 2014 | 2,727,059 | 14.12 | 5.63 | | 2,290 | | | |
|
|
These options have an exercise price range of $6.59 to $24.46. |
|
|
|
| | | | | | | | |
| | | Weighted | | | | | |
| | | Average | | | | | |
| | Weighted | Remaining | Aggregate | | | | |
| | average | Contractual | Intrinsic | | | | |
| Number of | exercise | Term | Value | | | | |
| shares | price ($) | (in years) | ($'000) | | | | |
Exercisable | 1,998,497 | $16.08 | 4.8 | 1,057 | | | | |
|
|
During each of the three months ended March 31, 2014 and 2013, respectively, no stock options became exercisable. During the nine months ended March 31, 2014 and 2013, respectively, 358,333 and 244,666 stock options became exercisable. Included in the 244,666 stock options are 30,000 stock options with respect to which the Remuneration Committee of the Board agreed to accelerate vesting, in August 2012, prior to the resignation of a non-employee director. During the three and nine months ended March 31, 2014, the Company received approximately $0.1 million from 10,000 stock options exercised. During the nine months ended March 31, 2013, the Company received approximately $0.2 million from 30,000 stock options exercised by the non-employee director that resigned. No stock options were exercised during the three months ended March 31, 2013. The Company issues new shares to satisfy stock option exercises. |
|
Restricted stock |
|
The following table summarizes restricted stock activity for the three and nine months ended March 31, 2014 and 2013: |
|
| | | | | | | | |
| | | Weighted | | | |
| Number of | | Average | | | |
| Shares of | | Grant Date | | | |
| Restricted | | Fair Value | | | |
| Stock | | ($' 000) | | | |
Non-vested – June 30, 2013 | 405,226 | | | 4,393 | | | | |
Granted – August 2013 | 187,963 | | | 1,382 | | | | |
Vested – August 2013 | (16,907 | ) | | 161 | | | | |
Vested – February 2014 | (183,333 | ) | | 1,742 | | | | |
Forfeitures – October 2013 | (7,171 | ) | | 84 | | | | |
Non-vested – March 31, 2014 | 385,778 | | | 3,534 | | | | |
| | | |
Non-vested – June 30, 2012 | 646,617 | | | 7,061 | | | | |
Granted – August 2012 | 21,569 | | | 189 | | | | |
Granted – February 2013 | (183,333 | ) | | 1,016 | | | | |
Vested – August 2012 | (23,436 | ) | | 216 | | | | |
Non-vested – March 31, 2013 | 461,417 | | | 4,988 | | | | |
|
|
The fair value of restricted stock vesting during the three months ended March 31, 2014 and 2013, respectively, was $1.7 million and $1.0 million. The fair value of restricted stock vesting during the nine months ended March 31, 2014 and 2013, respectively, was $1.9 million and $1.2 million. A non-employee director resigned during the nine months ended March 31, 2014, and forfeited 7,171 shares of restricted stock. Included in the 23,436 shares of restricted stock that vested in August 2012 are 8,547 shares with respect to which the Remuneration Committee of the Board agreed to accelerate vesting prior to the resignation of a non-employee director. |
|
The fair value of restricted stock is based on the closing price of the Company's stock quoted on The Nasdaq Global Select Market on the date of grant. |
|
|
Stock-based compensation charge and unrecognized compensation cost |
|
The Company has recorded a stock compensation charge of $0.9 million and $1.1 million for the three months ended March 31, 2014 and 2013, respectively, which |
|
comprised: |
|
| | | | | | | | |
| | | | Allocated to cost | | | | |
| | | | of goods sold, IT | | Allocated to | | |
| | | | processing, | | selling, general | | |
| | Total | | servicing and | | and | | |
| | charge | | support | | administration | | |
Three months ended March 31, 2014 | | | | | | | | |
Stock-based compensation charge | $ | 922 | | - | $ | 922 | | |
Total – three months ended March 31, 2014 | $ | 922 | $ | - | $ | 922 | | |
| | |
Three months ended March 31, 2013 | | | | | | | | |
Stock-based compensation charge | $ | 1,092 | $ | - | $ | 1,092 | | |
Total – three months ended March 31, 2013 | $ | 1,092 | $ | - | $ | 1,092 | | |
|
|
The Company has recorded a stock compensation charge of $2.8 million and $3.3 million for the nine months ended March 31, 2014 and 2013, respectively, which comprised: |
|
| | | | | | | | |
| | | | | Allocated to cost | | | |
| | | | | of goods sold, IT | | Allocated to | |
| | | | | processing, | | selling, general | |
| | Total | | | servicing and | | and | |
| | charge | | | support | | administration | |
Nine months ended March 31, 2014 | | | | | | | | |
Stock-based compensation charge | $ | 2,826 | | $ | $- | $ | 2,826 | |
Reversal of stock compensation charge related to | | | | | | | | |
restricted stock forfeited | | (6 | ) | | - | | (6 | ) |
Total – nine months ended March 31, 2014 | $ | 2,820 | | $ | $- | $ | 2,820 | |
|
Nine months ended March 31, 2013 | | | | | | | | |
Stock-based compensation charge | $ | 3,325 | | $ | - | $ | 3,325 | |
Total – nine months ended March 31, 2013 | $ | 3,325 | | $ | $- | $ | 3,325 | |
|
|
The stock-based compensation charges have been allocated to selling, general and administration based on the allocation of the cash compensation paid to the employees. |
|
As of March 31, 2014, the total unrecognized compensation cost related to stock options was approximately $1.1 million, which the Company expects to recognize over approximately three years. As of March 31, 2014, the total unrecognized compensation cost related to restricted stock awards was approximately $3.0 million, which the Company expects to recognize over approximately two years. |
|
As of each of March 31, 2014 and June 30, 2013, respectively, the Company has recorded a deferred tax asset of approximately $1.5 million related to the stock-based compensation charge recognized related to employees and directors of Net1 as it is able to deduct the grant date fair value for taxation purposes in the United States. |
|