Share-Based Compensation

12 Months Ended

Jun. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

SHARE-BASED COMPENSATION:

The Company has incentive and non-qualified stock options outstanding that were granted to directors, officers, and other associates pursuant to authorization by the Board of Directors. The exercise price per share of each option equals the market value of a share of the Company’s common stock on the date of the grant. Substantially all of the options granted become exercisable in equal increments on the first three anniversaries of the date of grant. All outstanding options expire ten years from the date of grant. Since its inception in 1991, the Company has authorized approximately 41.2 million shares for issuance upon exercise of options. At June 30, 2014, approximately 9.8 million shares were available for issuance, of which approximately 6.8 million shares are reserved for the exercise of outstanding options and approximately 3.1 million shares remain available for grant.

The non-cash share-based compensation expenses included in the consolidated statements of operations are as follows:

	Fiscal Year Ended June 30,
(in thousands, except per share data)	2014			2013			2012
Selling, general and administrative	$	19,652		$	19,124		$	15,067
Research and development	2,031			1,640			1,239
Cost of sales	374			338			195
Total non-cash share-based compensation expense	22,057			21,102			16,501
Income tax benefit	(6,912		)	(6,721		)	(5,163		)
Total non-cash share-based compensation expense, net of tax benefit	$	15,145		$	14,381		$	11,338
Impact on diluted net income per share attributable to MICROS Systems, Inc. common shareholders	$	0.20		$	0.18		$	0.14

No non-cash share-based compensation expense has been capitalized for fiscal years 2014, 2013 and 2012.

Estimates of fair values of options granted were made on the date of grant using the following assumptions:

	Fiscal Year Ended June 30,
	2014		2013		2012
Weighted-average expected volatility	36	%	40	%	40	%
Expected volatility	33% - 38%		39% - 40%		39% - 41%
Expected term	5.4 – 5.8 years		5.4 – 5.8 years		4.8 – 5.7 years
Expected dividend yield	0	%	0	%	0	%
Risk-free interest rate	1.5% - 1.8%		0.7% - 1.1%		0.9% - 1.1%

The following is a summary of option activity during fiscal year 2014:

(in thousands, except per share data and number of years)	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at June 30, 2013	7,792		$	37.21	5.8	$	46,317
Granted	1,444		$	53.25
Exercised	(2,310	)	$	32.05
Forfeited or expired	(160	)	$	49.45
Outstanding at June 30, 2014	6,766		$	42.07	6.8	$	174,779
Exercisable at June 30, 2014	4,163		$	37.23	5.4	$	127,686

The weighted-average grant-date estimated fair value per share of options granted during fiscal years 2014, 2013 and 2012 was $19.00, $16.66, and $17.67, respectively. The total intrinsic value, which is the difference between the exercise price and the market price on the date of exercise, of options exercised during fiscal years 2014, 2013 and 2012 was approximately $50.6 million, $13.7 million, and $24.3 million, respectively.

As of June 30, 2014, there were approximately $33.7 million (net of estimated forfeitures) in non-cash share-based compensation costs related to non-vested options that are expected to be recognized in the Company’s consolidated statements of operations over a weighted-average period of 1.87 years.

Cash received from options exercised during fiscal years 2014, 2013 and 2012 was approximately $74.0 million, $9.1 million and $14.9 million, respectively.