Shareholders' Equity and Share-based Compensation

Share Repurchase

In April 2015, the Board of Directors approved an increase in the remaining available amount under the Company’s then effective share repurchase program from approximately $17.8 million to $50.0 million. The repurchases may be made from the open market pursuant to a pre-established Rule 10b5-1 trading plan (as amended, the "Repurchase Trading Plan") or through privately negotiated transactions.

In June 2015, the Company commenced a modified Dutch auction tender offer (the "Tender Offer") to repurchase an aggregate of $30.0 million of its outstanding common shares with a price range between $8.50 and $9.20 per share. In July 2015, the Company completed the Tender Offer in which it purchased 3,296,703 shares of its common shares, at a purchase price of $9.10 per share, for an aggregate purchase price of $30.0 million, excluding fees and expenses relating to the Tender Offer. These shares represented approximately 12.53% of the total number of the Company's common shares issued and outstanding as of June 30, 2015. The Tender Offer was part of the $50.0 million share repurchase program approved by the Board on April 15, 2015. Immediately following the completion of the Tender Offer, approximately $18.2 million remained available under the share repurchase program.

During the nine months ended March 31, 2016, the Company repurchased 4,695,499 shares from the open market, including 3,296,703 shares in the Tender Offer, for a total cost of $41.8 million, at an average price of $8.90 per share, excluding fees and related expenses of $0.3 million, under the share repurchase program. Since the inception of the program in 2010, the Company repurchased an aggregate of 5,723,093 shares from the open market for a total cost of $50.8 million, at an average price of $8.87 per share, excluding fees and related expenses. No repurchased shares have been retired. Of the 5,723,093 repurchased shares, 44,345 shares with a weighted average repurchase price of $13.86 per share, were reissued at an average price of $2.38 per share for option exercises and vested restricted share units.

The Company accounts for treasury stock under the cost method. Shares repurchased are accounted for as treasury shares and the total cost of shares repurchased is recorded as a reduction of shareholders' equity. From time to time, treasury shares may be reissued as part of the Company's share-based compensation programs. Gains on re-issuance of treasury stock are credited to additional paid-in capital; losses are expensed to additional paid-in capital to offset the net gains, if any, from previous sales or re-issuance of treasury stock. Any remaining balance of the losses are expensed to retained earnings.

Stock Options

The following table summarizes the Company's stock option activities for the nine months ended March 31, 2016:



			Weighted
			Average
	Number of		Exercise Price		Aggregate
	Shares		Per Share		Intrinsic Value
Outstanding at June 30, 2015	2,836,217		$	10.77	$	1,410,538
Granted	—		$	—
Exercised	(426,612	)	$	7.59	$	844,067
Canceled or forfeited	(310,512	)	$	12.34
Outstanding at March 31, 2016	2,099,093		$	11.19	$	3,855,252

Information with respect to stock options outstanding and exercisable at March 31, 2016 is as follows:



	Options Outstanding				Options Vested and Exercisable
	Number Outstanding	Weighted-Average Remaining Contractual Life (years)	Weighted-Average Exercise Price		Number Exercisable	Weighted-Average Exercise Price
Total options outstanding	2,099,093	4.73	$	11.19	1,791,713	$	11.80
Options vested and expected to vest	2,074,209	4.69	$	11.23

Options expected to vest are the result of applying the pre-vesting forfeiture rate assumption to total outstanding options.

The fair value of stock options granted were estimated at the date of grant using the Black-Scholes option valuation model for the nine months ended March 31, 2016 with the following weighted average assumptions:



	Nine Months Ended March 31,
	2016
Volatility rate	39.44% - 40.13%
Risk-free interest rate	1.6% - 1.7%
Expected term	5.5 years
Dividend yield	0%

Historically, the Company estimates its expected volatility based on that of the publicly traded shares of industry peers over a period equivalent to the expected term of the stock awards granted. Beginning in July 2015, the Company's publicly traded shares history is also included in estimating the volatility rate.

Restricted Stock Units ("RSU")

The following table summarizes the Company's RSU activities for the nine months ended March 31, 2016:



	Number of Restricted Stock Units		Weighted Average Grant Date Fair Value Per Share		Weighted Average Remaining Recognition Period (Years)	Aggregate Intrinsic Value
Nonvested at June 30, 2015	873,946		$	8.64	1.77	$	7,638,288
Granted	409,079		$	10.93
Vested	(271,859	)	$	8.83
Forfeited	(94,293	)	$	8.78
Nonvested at March 31, 2016	916,873		$	9.59	1.89	$	10,864,945
RSUs vested and expected to vest	776,954				1.79	$	9,206,903

The fair value of RSU is estimated based on the market price of the Company's share on the date of grant.

Employee Share Purchase Plan ("ESPP")

The assumptions used to estimate the fair values of common shares issued under the ESPP were as follows:




	Nine Months Ended March 31,
	2016
Volatility rate	32.2%
Risk-free interest rate	0.3% - 0.9%
Expected term	1.3 years
Dividend yield	0%

Share-based Compensation Expense

The total share-based compensation expense related to stock options, RSUs and ESPP described above, recognized in the condensed consolidated statements of operations for the periods presented was as follows:



	Three Months Ended March 31,				Nine Months Ended March 31,
	2016		2015		2016		2015
	(in thousands)				(in thousands)
Cost of goods sold	$	187	$	167	$	475	$	495
Research and development	309		43		766		542
Selling, general and administrative	677		730		1,806		2,282
	$	1,173	$	940	$	3,047	$	3,319

As of March 31, 2016, total unrecognized compensation cost under the Company's equity plans was $6.0 million, which is expected to be recognized over a weighted-average period of 1.7 years.