SHARE-BASED COMPENSATION

9 Months Ended

Mar. 31, 2014

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

8. SHARE-BASED COMPENSATION

Employee Stock Purchase Plan

The 2008 Employee Stock Purchase Plan (the “2008 ESPP”) provides that eligible employees are able to contribute up to 10% of their eligible earnings towards the quarterly purchase of the Company’s common stock. The employee’s purchase price is equal to 85% of the fair market value. During the nine months ended March 31, 2014 and 2013, employees purchased 40,833 and 58,531 shares of common stock for approximately $2.5 million and $2.3 million, respectively, under the 2008 ESPP.

Share-Based Award Plans

Stock option activity as of and for the nine months ended March 31, 2014 is summarized below:

			Weighted Average
	Shares		Exercise Price		Remaining Contractual Term	Aggregate Intrinsic Value
	(in 000s)		(per share)		(years)	(in 000s)
Balance outstanding as of June 30, 2013	1,170		$	29.60		$	31,391
Granted	—		—
Exercised	(347	)	31.27
Forfeited or expired	(5	)	40.97
Balance outstanding as of March 31, 2014	818		$	28.81	2.67	$	30,630
Exercisable as of March 31, 2014	657		$	26.49	2.30	$	26,120

Restricted stock and RSU activity as of and for the nine months ended March 31, 2014 is summarized below:

	Restricted Stock		Weighted Average Grant Date Fair Value		RSUs		Weighted Average Grant Date Fair Value
	(in 000s)		(per share)		(in 000s)		(per share)
Balance outstanding as of June 30, 2013	571		$	43.45	82		$	45.65
Granted	274		69.97		18		70.45
Vested / Released	(181	)	42.37		(22	)	45.40
Forfeited or expired	(21	)	46.26		—		—
Balance outstanding as of March 31, 2014	643		$	54.96	78		$	51.55

Share-Based Compensation

The following table presents share-based compensation expense and related effect of the income tax benefit included in the Company’s unaudited condensed consolidated statements of operations:

	Three Months Ended March 31,				Nine Months Ended March 31,
	2014		2013		2014		2013
	(in 000s)
Selling, general and administrative	$	2,154	$	2,381	$	7,129	$	6,408
Research and development costs	1,039		1,096		3,201		3,280
Cost of gaming equipment and systems and product leases and royalties	39		42		25		(12		)
Share-based compensation expense before tax	3,232		3,519		10,355		9,676
Income tax benefit	1,131		1,231		3,624		3,386
Net share-based compensation expense	$	2,101	$	2,288	$	6,731	$	6,290

As of March 31, 2014, there was $1.6 million of total unrecognized compensation expense related to the unvested portion of stock options which will be recognized over the subsequent 1.26 years. In addition, as of March 31, 2014, there was $31.8 million of total unrecognized compensation expense related to the unvested portion of restricted stock and RSUs which will be recognized over the subsequent 2.07 years.