Note 16. Share-based Compensation

At June 30, 2015, the Company had four share-based employee compensation plans (the “2003 Plan,” the 2006 Long-term Incentive Plan (“LTIP”) or “2006 LTIP”, the 2011 LTIP and the 2014 LTIP). Together these plans authorized an aggregate total of 8.1 million shares to be issued. The plans have a total of 2.5 million shares available for future issuances.

The Company issues share-based compensation awards with a vesting period ranging up to 3 years and a maximum contractual term of 10 years. The Company issues new shares of stock when stock options are exercised. As of June 30, 2015, there was $10.4 million of total unrecognized compensation cost related to non-vested share-based compensation awards. That cost is expected to be recognized over a weighted average period of 2.0 years.

Stock Options

The Company measures share-based compensation cost for options using the Black-Scholes option pricing model. The following table presents the weighted average assumptions used to estimate fair values of the stock options granted during the fiscal years ended June 30, the estimated annual forfeiture rates used to recognize the associated compensation expense and the weighted average fair value of the options granted:

	June 30, 2015			June 30, 2014			June 30, 2013
Risk-free interest rate	1.7		%	2.1		%	1.0		%
Expected volatility	52.1		%	62.8		%	61.6		%
Expected dividend yield	0.0		%	0.0		%	0.0		%
Forfeiture rate	6.5		%	7.5		%	7.5		%
Expected term (in years)	5.5 years			5.9 years			6.1 years
Weighted average fair value	$	17.73		$	8.55		$	2.53

Expected volatility is based on the historical volatility of the price of our common shares during the historical period equal to the expected term of the option. The Company uses historical information to estimate the expected term, which represents the period of time that options granted are expected to be outstanding. The risk-free rate for the period equal to the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The forfeiture rate assumption is the estimated annual rate at which unvested awards are expected to be forfeited during the vesting period. This assumption is based on our actual forfeiture rate on historical awards. Periodically, management will assess whether it is necessary to adjust the estimated rate to reflect changes in actual forfeitures or changes in expectations. Additionally, the expected dividend yield is equal to zero, as the Company has not historically issued, and has no immediate plans to issue, a dividend.

A stock option roll-forward as of June 30, 2015, 2014 and 2013 and changes during the years then ended, is presented below:

							Weighted
			Weighted-				Average
			Average		Aggregate		Remaining
			Exercise		Intrinsic		Contractual
(In thousands, except for weighted average price and life data)	Awards		Price		Value		Life (yrs.)

Outstanding at July 1, 2012	2,747		$	6.42
Granted	565		4.30
Exercised	(511	)	5.44		$	1,825
Forfeited, expired or repurchased	(482	)	8.39

Outstanding at June 30, 2013	2,319		5.71
Granted	780		13.90
Exercised	(783	)	6.41		$	24,375
Forfeited, expired or repurchased	(111	)	6.49

Outstanding at June 30, 2014	2,205		7.84
Granted	513		36.71
Exercised	(665	)	6.47		$	33,201
Forfeited, expired or repurchased	(78	)	18.33

Outstanding at June 30, 2015	1,975		$	15.39	$	86,983	7.2


Vested and expected to vest at June 30, 2015	1,910		$	15.01	$	84,865	7.1
Exercisable at June 30, 2015	858		$	5.97	$	45,879	5.5

Restricted Stock

The Company measures restricted stock compensation costs based on the stock price at the grant date less an estimate for forfeitures. The annual forfeiture rate used to calculate compensation expense was 6.5% for fiscal year ended June 30, 2015 and 7.5% for fiscal years ended June 30, 2014 and June 30, 2013.

A summary of restricted stock awards as of June 30, 2015, 2014, and 2013 and changes during the fiscal years then ended, is presented below:

(In thousands)	Awards		Weighted Average Grant - date Fair Value		Aggregate Intrinsic Value

Non-vested at July 1, 2012	74		$	6.94
Granted	38		5.06
Vested	(110	)	6.30		$	491
Forfeited	(2	)	6.94

Non-vested at June 30, 2013	—		—
Granted	269		24.07
Vested	(252	)	23.45		$	10,440
Forfeited	(1	)	24.48

Non-vested at June 30, 2014	16		34.01
Granted	103		37.97
Vested	(14	)	36.06		$	664
Forfeited	(7	)	36.59

Non-vested at June 30, 2015	98		$	37.83

Employee Stock Purchase Plan

In February 2003, the Company’s stockholders approved an Employee Stock Purchase Plan (“ESPP”). Employees eligible to participate in the ESPP may purchase shares of the Company’s stock at 85% of the lower of the fair market value of the common stock on the first day of the calendar quarter, or the last day of the calendar quarter. Under the ESPP, employees can authorize the Company to withhold up to 10% of their compensation during any quarterly offering period, subject to certain limitations. The ESPP was implemented on April 1, 2003 and is qualified under Section 423 of the Internal Revenue Code. The Board of Directors authorized an aggregate total of 1.1 million shares of the Company’s common stock for issuance under the ESPP. During the fiscal year ended June 30, 2015 and 2014, 12 thousand shares and 18 thousand shares were issued under the ESPP, respectively. As of June 30, 2015, 438 thousand total cumulative shares have been issued under the ESPP.

The following table presents the allocation of share-based compensation costs recognized in the Consolidated Statements of Operations by financial statement line item:

	For Fiscal Year Ended June 30,
(In thousands)	2015		2014		2013
Selling, general and administrative	$	5,145	$	7,388	$	1,206
Research and development	523		675		99
Cost of sales	729		963		172

Total	$	6,397	$	9,026	$	1,477


Tax benefit at statutory rate	$	2,159	$	3,375	$	169