11. Share-Based Compensation

Share-based compensation and the related tax benefit recognized in our condensed consolidated statements of income were as follows (in millions):

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2017		2016		2017		2016
Cost of revenue	$	0.6	$	0.5	$	1.7	$	1.3
Research and development		8.7		8.1		25.0		22.1
Selling, general, and administrative		6.8		6.4		19.6		17.5
Total	$	16.1	$	15.0	$	46.3	$	40.9
Income tax benefit on share-based compensation	$	4.1	$	4.0	$	12.1	$	10.8

Historically, we have issued new shares in connection with our share-based compensation plans, however, treasury shares are also now available for issuance. Any additional shares repurchased under our common stock repurchase program will be available for issuance under our share-based compensation plans.

Stock Options

Stock option activity, including stock options granted, exercised, and forfeited, weighted average exercise prices for stock options outstanding and exercisable, and the aggregate intrinsic value were as follows:

	Stock			Weighted		Aggregate
	Option			Average		Intrinsic
	Awards			Exercise		Value
	Outstanding			Price		(in millions)
Balance as of June 30, 2016		2,711,542		$	46.69
Granted		259,226			53.09
Exercised		(275,460	)		27.70
Forfeited		(127,763	)		71.35
Balance as of March 31, 2017		2,567,545			48.15	$	28.9
Exercisable at March 31, 2017		1,997,524			42.33	$	28.9

The aggregate intrinsic value was determined using the closing price of our common stock on March 24, 2017 of $49.18 and excludes the impact of stock options that were not in-the-money.

Deferred Stock Units

DSU activity, including DSUs granted, delivered, and forfeited, and the balance and aggregate intrinsic value of DSUs was as follows:

				Aggregate
	DSU			Intrinsic
	Awards			Value
	Outstanding			(in millions)
Balance as of June 30, 2016		1,005,981
Granted		833,069
Delivered		(375,692	)
Forfeited		(130,504	)
Balance as of March 31, 2017		1,332,854		$	65.5

The aggregate intrinsic value was determined using the closing price of our common stock on March 24, 2017 of $49.18.

Of the shares delivered, 96,665 shares valued at $5.2 million were withheld to meet statutory minimum tax withholding requirements.

Market Stock Units

Our Amended and Restated 2010 Incentive Compensation Plan provides for the grant of MSU awards to our employees, consultants, and directors. An MSU is a promise to deliver shares of our common stock at a future date based on the achievement of market-based performance requirements in accordance with the terms of the MSU grant agreement.

We have granted MSUs to our executive officers, which are designed to vest in three tranches with the target quantity for each tranche equal to one-third of the total MSU grant. The first tranche vests based on a one-year performance period; the second tranche vests based on a two-year performance period; and the third tranche vests based on a three-year performance period. Performance is measured based on the achievement of a specified level of total stockholder return, or TSR, relative to the TSR of the Philadelphia Semiconductor Index, or SOX Index. The potential payout ranges from 0% to 200% of the grant target quantity and is adjusted on a two-to-one ratio based on our TSR performance relative to the SOX Index TSR performance using the following formula:

(100% + ([Synaptics TSR—SOX Index TSR] x 2))

Beginning with the MSU grants in fiscal 2015, the payout for the first tranche and the second tranche will not exceed 100% and the payout for the third tranche will be calculated based on the total target quantity for the entire grant multiplied by the payout factor, which will then be reduced by shares issued for the first tranche and the second tranche.

Delivery of shares earned, if any, will take place on the dates provided in the applicable MSU grant agreement, assuming the grantee is still an employee, consultant, or director of our company at the end of the applicable performance period. On the delivery date, we withhold shares to cover statutory minimum tax withholding requirements and deliver a net quantity of shares to the employee, consultant, or director after such withholding. Until delivery of shares, the grantee has no rights as a stockholder with respect to any shares underlying the MSU award.

During the nine months ended March 31, 2017, MSU activity, including MSUs granted, delivered, and forfeited, and the balance and aggregate intrinsic value of MSUs as of March 31, 2017 was as follows:

				Aggregate
	MSU			Intrinsic
	Awards			Value
	Outstanding			(in millions)
Balance as of June 30, 2016		146,150
Granted		105,800
Performance adjustment		(55,739	)
Delivered		(10,339	)
Forfeited		(27,276	)
Balance as of March 31, 2017		158,596		$	7.8

We value MSUs using the Monte Carlo simulation model on the date of grant and amortize the compensation expense over the three-year performance and service period on a straight-line basis. The unrecognized share-based compensation cost of our outstanding MSUs was approximately $11.9 million as of March 31, 2017, which will be recognized over a weighted average period of approximately 1.3 years.

Employee Stock Purchase Plan

Shares purchased, weighted average purchase price, cash received, and the aggregate intrinsic value for employee stock purchase plan purchases during the nine-month period ended March 31, 2017 were as follows (in millions, except for shares purchased and weighted average price):

Shares purchased		153,185
Weighted average purchase price	$	46.89
Cash received	$	7.2
Aggregate intrinsic value	$	1.3