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Share-based Compensation | 9 Months Ended
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Mar. 31, 2016
Share Based Compensation [Abstract] |
Share-based Compensation |
6. | Share-based Compensation
Shares reserved for issuance As of March 31, 2016, the Company had reserved for issuance (in thousands):
|  | March 31, 2016 |  |  | June 30, 2015 |
2014 Employee Stock Purchase Plan |  |  | 10,001 |  |  |  | 12,000 |
Employee stock options and awards outstanding |  |  | 11,174 |  |  |  | 15,273 |
Employee stock options and awards available for grant |  |  | 5,140 |  |  |  | 5,450 |
Total shares reserved for issuance |  |  | 26,315 |  |  |  | 32,723 |
Share-based compensation expense recognized in the condensed consolidated financial statements by line item caption is as follows (in thousands):
|  | Three Months Ended |  |  | Nine Months Ended |
|  | March 31, 2016 |  |  | March 31, 2015 |  |  | March 31, 2016 |  |  | March 31, 2015 |
Cost of product revenue |  | $ | 205 |  |  | $ | 265 |  |  | $ | 777 |  |  | $ | 823 |
Cost of service revenue |  |  | 223 |  |  |  | 254 |  |  |  | 867 |  |  |  | 816 |
Research and development |  |  | 1,137 |  |  |  | 1,423 |  |  |  | 3,857 |  |  |  | 4,611 |
Sales and marketing |  |  | 996 |  |  |  | 1,291 |  |  |  | 3,791 |  |  |  | 4,414 |
General and administrative |  |  | 942 |  |  |  | 1,139 |  |  |  | 2,828 |  |  |  | 3,271 |
Total share-based compensation expense |  | $ | 3,503 |  |  | $ | 4,372 |  |  | $ | 12,120 |  |  | $ | 13,935 |
During the three and nine months ended March 31, 2016 and 2015, the Company did not capitalize any share-based compensation expense in inventory, as the amounts were immaterial. Stock Awards Stock awards may be granted under the 2013 Equity Incentive Plan (the “2013 Plan”) on terms approved by the Compensation Committee of the Board of Directors. Stock awards generally provide for the issuance of restricted stock units (including performance or market-based restricted stock units) which vest over a fixed period of time or based upon the satisfaction of certain ;performance criteria. The following table summarizes stock award activity for the nine months ended March 31, 2016 (in thousands, except grant date fair value):
|  | Number of |  |  | Weighted- |  |  |  |  |
|  | Shares |  |  | Average Grant- |  |  | Aggregate Fair |
|  | (000’s) |  |  | Date Fair Value |  |  | Market Value ($000’s) |
Non-vested stock awards outstanding at June 30, 2015 |  |  | 4,597 |  |  | $ | 3.82 |  |  |  |  |
Granted |  |  | 3,010 |  |  | $ | 3.12 |  |  |  |  |
Vested |  |  | (2,198 | ) |  | $ | 4.30 |  |  |  |  |
Cancelled |  |  | (992 | ) |  | $ | 2.84 |  |  |  |  |
Non-vested stock awards outstanding at March 31, 2016 |  |  | 4,417 |  |  | $ | 3.33 |  |  | $ | 21,113 |
The following table summarizes stock option activity for the nine months ended March 31, 2016 (in thousands, except per share and contractual term):
|  |  |  |  |  | Weighted- |  |  | Weighted- |  |  |  |  |
|  |  |  |  |  | Average |  |  | Average |  |  | Aggregate |
|  | Number of |  |  | Exercise |  |  | Remaining |  |  | Intrinsic |
|  | Shares |  |  | Price |  |  | Contractual |  |  | Value |
|  | (000’s) |  |  | Per Share |  |  | Term (years) |  |  | (000’s) |
Options outstanding at June 30, 2015 |  |  | 10,604 |  |  | $ | 4.03 |  |  |  | 3.79 |  |  | $ | 410 |
Granted |  |  | 5 |  |  | $ | 3.79 |  |  |  |  |  |  |  |  |
Exercised |  |  | (276 | ) |  | $ | 3.12 |  |  |  |  |  |  |  |  |
Cancelled |  |  | (3,576 | ) |  | $ | 3.91 |  |  |  |  |  |  |  |  |
Options outstanding at March 31, 2016 |  |  | 6,757 |  |  | $ | 4.13 |  |  |  | 4.25 |  |  | $ | 936 |
Exercisable at March 31, 2016 |  |  | 4,560 |  |  | $ | 4.25 |  |  |  | 3.16 |  |  | $ | 361 |
Vested and expected to vest at March 31, 2016 |  |  | 6,393 |  |  | $ | 4.17 |  |  |  | 4.09 |  |  | $ | 807 |
The weighted-average grant-date fair value of options granted during the nine months ended March 31, 2016 was $1.59. The weighted-average grant-date fair value of options granted during the three and nine months ended March 31, 2015 was $1.34 and $1.91, respectively. The weighted-average fair value of shares granted under the Company’s 2014 ESPP during the three and nine months ended March 31, 2016 was $1.88 and $1.93, respectively. The weighted-average fair value of shares granted under the Company’s 2014 ESPP and 1999 ESPP during the three and nine months ended March 31, 2015 was $0.59 and $1.02, respectively. The Company uses the straight-line method for expense attribution, and the Company estimates forfeitures and only recognizes expense for those shares expected to vest. The Company’s estimated forfeiture rate for fiscal 2016 is based on the Company’s historical forfeiture experience and is 13% for non-executives and 19% for executives. The fair value of each stock option grant under the Company's 2013 Plan and 2005 Equity Incentive Plan is estimated on the date of grant using the Black-Scholes-Merton option valuation model with the weighted average assumptions noted in the following table. The Company uses the Monte-Carlo simulation model to determine the fair value and the derived service period of stock awards with market conditions, on the date of the grant. The expected term of options granted is derived from historical data on employee exercise and post-vesting employment termination behavior. The risk-free rate is based upon the estimated life of the option and is based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatility is based on a blended rate of the implied volatilities from traded options on the Company’s stock and historical volatility on the Company’s stock. The fair value of each share purchase option under the Company's 2014 ESPP and 1999 ESPP is estimated on the date of grant using the Black-Scholes-Merton option valuation model with the weighted average assumptions noted in the following table. The expected term of the 2014 ESPP and the 1999 ESPP represents the term of the offering period of each option. The risk-free rate is based upon the estimated life and is based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatility is based on a blended rate of the implied volatilities from traded options and historical volatility on the Company’s stock.
|  | Stock Option Plan |  |  | Employee Stock Purchase Plan |  |  | Stock Option Plan |  |  | Employee Stock Purchase Plan |
|  | Three Months Ended |  |  | Three Months Ended |  |  | Nine Months Ended |  |  | Nine Months Ended |
|  | March 31, 2016 |  |  | March 31, 2015 |  |  | March 31, 2016 |  |  | March 31, 2015 |  |  | March 31, 2016 |  |  | March 31, 2015 |  |  | March 31, 2016 |  |  | March 31, 2015 |
Expected life |  |  | - |  |  | 4.6 years |  |  | 1.45 years |  |  | 0.50 years |  |  | 4.0 years |  |  | 4.7 years |  |  | 1.25 |  |  | 0.33 years |
Risk-free interest rate |  |  | — | % |  |  | 1.49 | % |  |  | 0.52 | % |  |  | 0.07 | % |  |  | 1.78 | % |  |  | 1.60 | % |  |  | 0.44 | % |  |  | 0.04 | %
Volatility |  |  | — | % |  |  | 54 | % |  |  | 57 | % |  |  | 58 | % |  |  | 52 | % |  |  | 54 | % |  |  | 57 | % |  |  | 58 | %
Dividend yield |  |  | — | % |  |  | — | % |  |  | — | % |  |  | — | % |  |  | — | % |  |  | — | % |  |  | — | % |  |  | — | %

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51659978&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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