Page 61 - 2018 Annual Report

Table of Contents
SARs are redeemable solely in Company common stock. The exercise price of stock option awards may be settled by the holder with cash or by tendering Company common stock.
A summary of SARs and stock options activity is presented below:
Year Ended June 30, 2018
(Shares in thousands) Shares
Weighted- Average Exercise Price
Outstanding, beginning of year 1,218
$ 42.26 58.40 37.55 55.64
Granted 286
Exercised (58)
Forfeited (45)
Outstanding, end of year 1,401
$ 45.32
Exercisable at end of year 789
$ 41.08
Expected to vest at end of year 1,379
$ 45.22
The weighted-average remaining contractual terms for SARs and stock options outstanding, exercisable, and expected to vest at June 30, 2018 were 6.6, 5.3, and 6.6 years, respectively. The aggregate intrinsic values of SARs and stock options outstanding, exercisable, and expected to vest at June 30, 2018 were $34,869 $22,927, and $34,440, respectively. The aggregate intrinsic value of the SARs and stock options exercised during fiscal 2018, 2017, and 2016 was $1,765, $8,396, and $2,422, respectively.
The total fair value of shares vested during fiscal 2018, 2017, and 2016 was $2,149, $1,788, and $1,291, respectively.
Performance Shares
Performance shares are paid in shares of Applied stock at the end of a three-year period provided the Company achieves goals established by the committee. The number of Applied shares payable will vary depending on the level of the goals achieved.
A summary of nonvested performance shares activity at June 30, 2018 is presented below:
The Committee set three one-year goals for each of the 2018, 2017 and 2016 grants. Each fiscal year during the three-year term has its own separate goals, tied to the Company’s earnings before interest, tax, depreciation, and amortization (EBITDA) and after-tax return on assets (ROA). Achievement during any particular fiscal year is awarded and “banked” for payout at the end of the three-year term. For the outstanding grants as of June 30, 2018, the maximum number of shares which could be earned in future periods was 67.
Year Ended June 30, 2018
(Shares in thousands) Shares
Weighted- Average Grant-Date Fair Value
Nonvested, beginning of year 52
$ 43.99 47.13 48.76
Awarded 51
Vested (10)
Nonvested, end of year 93
$ 45.16
52
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