5. Stock Options and Restricted Stock Awards

The Company maintains the 2014 Equity Incentive Plan (the “2014 Plan”) for the purpose of granting equity awards to employees and directors. The 2014 Plan was approved by the Company’s stockholders and became effective in November 2014 and was subsequently amended in May 2015. The 2014 Plan replaced the 2007 Equity Incentive Plan (the “2007 Plan”), and no further equity awards may be granted under the 2007 Plan. The Company also maintains one other terminated plan, the 2003 Stock Option Plan (the “2003 Plan”) (the 2014 Plan, the 2007 Plan, and the 2003 Plan are collectively referred to as the “Plans”).

The 2014 Plan allows for the granting of up to 2,030,000 shares of common stock as approved by the board of directors or committees thereof in the form of nonqualified or incentive stock options, restricted stock awards, restricted stock unit awards, performance share awards, performance unit awards or stock appreciation rights to officers, directors, consultants and employees of the Company.

Stock Options

All options granted under the Plans become exercisable over periods established at the date of grant. The option exercise price is generally not less than the estimated fair market value of the Company’s common stock at the date of grant, as determined by the Company’s management and board of directors. In addition, the Company has granted nonqualified stock options to a director outside of the Plans.

Stock option activity is as follows:



	Number of Options		Weighted Average Exercise Price
Options outstanding at June 30, 2014	922,809		$	10.16
Exercised	(222,937	)	$	9.65
Options outstanding at June 30, 2015	699,872		$	10.32
Exercised	(87,817	)	$	11.46
Forfeited or expired	(5,176	)	$	12.37
Options outstanding at June 30, 2016	606,879		$	10.14
Exercised	(519,297	)	$	10.33
Expired	(9,381	)	$	8.83
Options outstanding at June 30, 2017	78,201		$	9.07

As of June 30, 2017, all options were fully vested. An employee’s vested options must be exercised at or within 90 days of termination to avoid forfeiture. The Company determined the fair value of options using the Black-Scholes option pricing model. The estimated fair value of options, including the effect of estimated forfeitures, was recognized as expense on a straight-line basis over the options’ vesting periods. There were no options granted during the years ended June 30, 2017, 2016 or 2015.

The aggregate intrinsic value of a stock option award is the amount by which the market value of the underlying stock exceeds the exercise price of the award. The aggregate intrinsic value for vested and outstanding options at June 30, 2017, 2016 and 2015, was $1,811, $4,025 and $11,286, respectively. The total aggregate intrinsic value of options exercised during the years ended June 30, 2017, 2016 and 2015, was $7,955, $417, and $4,907, respectively. Cash received from option exercises was $5,363, $1,006 and $2,152 for the years ended June 30, 2017, 2016 and 2015, respectively. The weighted average remaining contractual life of options outstanding at June 30, 2017 was 0.71 years. Shares supporting option exercises are sourced from new share issuances.

Restricted Stock

The fair value of each restricted stock award was equal to the fair market value of the Company’s common stock at the date of grant. Vesting of time based restricted stock awards range from one to three years. The estimated fair value of restricted stock awards, including the effect of estimated forfeitures, is recognized on a straight-line basis over the restricted stock’s vesting period.

Restricted stock award activity is as follows:



	Number of Shares		Weighted Average Grant Date Fair Value
Outstanding at June 30, 2014	1,169,266		$	18.96
Granted	362,072		$	30.30
Forfeited	(119,081	)	$	21.43
Vested	(569,163	)	$	16.46
Outstanding at June 30, 2015	843,094		$	25.16
Granted	522,415		$	19.30
Forfeited	(230,710	)	$	24.83
Vested	(487,226	)	$	22.27
Outstanding at June 30, 2016	647,573		$	23.24
Granted	258,346		$	21.80
Forfeited	(103,140	)	$	22.11
Vested	(316,195	)	$	24.21
Outstanding at June 30, 2017	486,584		$	21.26

Total fair value of time-based restricted stock that vested during fiscal 2017, 2016 and 2015 was $7,655, $10,851, and $9,370, respectively. Estimated pre-vesting forfeitures are considered in determining stock-based compensation expense. As of June 30, 2017, 2016 and 2015, the Company estimated its weighted average forfeiture rate at 17.1%, 17.0% and 19.2%, respectively. As of June 30, 2017, there was approximately $7,780 of total unrecognized compensation expense, net of the effect of estimated forfeitures, related to nonvested restricted stock awards which is expected to be recognized over a weighted-average period of 2.2 years.

Performance-Based Restricted Stock

The Company also grants performance based restricted stock awards to certain executives and other management. Fiscal 2017 awards vest based on the Company’s total shareholder return relative to total shareholder return of the peer group (a market condition), as measured by the closing prices of the stock of the Company and its peer group for the 90 trading days preceding July 1, 2016 compared to the closing prices for the 90 trading days preceding July 1, 2019. Fiscal 2016 and fiscal 2015 awards included grants that vested based upon the achievement of certain thresholds measuring total shareholder return during periods within the fiscal year as compared to a pre-determined peer group of companies, and grants that vest based upon achievement of certain thresholds measuring annual revenue growth during the fiscal year as compared to a pre-determined peer group of companies. The aggregate maximum shares granted were as follows:



Performance Measurement	2017	2016	2015
Total shareholder return	336,826	156,509	76,112
Annual revenue growth	N/A	156,509	76,112

The results of the Company’s performance based restricted stock awards for fiscal 2016 and 2015 were as follows:



	Total Shareholder Return			Annual Revenue Growth
	% Achievement		Shares Vested	% Achievement		Shares Vested
Fiscal 2015	69	%	26,339	200	%	76,112
Fiscal 2016	—	%	0	—	%	0

Performance-based restricted stock award activity is as follows:



	Number of Shares		Weighted Average Grant Date Fair Value
Outstanding at June 30, 2014	107,132		$	14.68
Granted	152,224		$	22.03
Vested	(107,132	)	$	14.68
Outstanding at June 30, 2015	152,224		$	22.03
Granted	313,018		$	16.67
Forfeited	(52,680	)	$	28.64
Vested	(102,451	)	$	25.58
Outstanding at June 30, 2016	310,111		$	16.67
Granted	336,826		$	11.97
Forfeited	(328,353	)	$	16.41
Outstanding at June 30, 2017	318,584		$	11.97

Total fair value of performance-based restricted stock that vested during fiscal 2017, 2016 and 2015 was $0, $2,621, and $1,573, respectively. Estimated pre-vesting forfeitures are considered in determining stock-based compensation expense. As of June 30, 2017, there was approximately 2,743 of total unrecognized compensation expense, related to nonvested performance-based restricted stock awards, which is expected to be recognized over a weighted-average period of 2 years.

Restricted Stock Units

The Company grants restricted stock units to members of the Board of Directors. Restricted stock units represent the right to receive payment in the form of shares of the Company’s common stock or in cash at the Company’s option. Restricted stock unit payments would occur within 30 days following the six month anniversary of the date that the director ceases to serve on the Board or, if the restricted stock units are granted in lieu of an annual cash retainer, on the payment date selected by the director that is at least two years after the grant date. The estimated fair value of restricted stock awards is recognized on a straight-line basis over the vesting period.

Restricted stock unit activity is as follows:



	Number of Shares		Weighted Average Grant Date Fair Value
Restricted stock units outstanding at June 30, 2014	296,131		$	10.09
Granted	41,172		$	29.57
Converted to common stock	(74,360	)	$	11.90
Restricted stock units outstanding at June 30, 2015	262,943		$	12.62
Granted	47,586		$	22.27
Converted to common stock	(5,713	)	$	22.18
Restricted stock units outstanding at June 30, 2016	304,816		$	13.95
Granted	54,064		$	21.21
Forfeited	(2,974	)	$	21.01
Converted to common stock	(6,476	)	$	29.34
Restricted stock units outstanding at June 30, 2017	349,430		$	14.73

Stock-Based Compensation Expense

The following amounts were recognized as stock-based compensation expense in the consolidated statements of operations:



Year Ended June 30, 2017	Restricted Stock Awards		Employee Stock Purchase Plan		Restricted Stock Units		Total
Cost of goods sold	$	588	$	101	$	—	$	689
Selling, general and administrative	6,568		1,065		1,024		8,657
Research and development	879		129		—		1,008
Total stock-based compensation expense	$	8,035	$	1,295	$	1,024	$	10,354



Year Ended June 30, 2016	Restricted Stock Awards		Employee Stock Purchase Plan		Restricted Stock Units		Total
Cost of goods sold	$	679	$	115	$	—	$	794
Selling, general and administrative	8,215		1,167		1,000		10,382
Research and development	1,681		120		—		1,801
Total stock-based compensation expense	$	10,575	$	1,402	$	1,000	$	12,977



Year Ended June 30, 2015	Restricted Stock Awards		Employee Stock Purchase Plan		Restricted Stock Units		Total
Cost of goods sold	$	937	$	64	$	—	$	1,001
Selling, general and administrative	10,486		825		917		12,228
Research and development	1,388		101		—		1,489
Total stock-based compensation expense	$	12,811	$	990	$	917	$	14,718

Shares Available for Grant

The following summarizes shares available for grant under the Company’s 2014 Plan:



Shares available for grant at June 30, 2014	—
Reserved	2,030,000
Granted	(171,411	)
Forfeited or cancelled	5,866
Shares available for grant at June 30, 2015	1,864,455
Granted	(883,019	)
Forfeited or cancelled	133,499
Shares available for grant at June 30, 2016	1,114,935
Granted	(649,236	)
Forfeited or cancelled	415,700
Shares available for grant at June 30, 2017^(a)	881,399


(a)	Excludes the effect of shares granted, exercised, forfeited or expired related to activity from shares granted outside of the 2014 Plan.