10. Stock Benefit Plans

Stock-Based Compensation

In fiscal years 2015, 2014 and 2013, the Company recorded stock-based compensation expense of $9.9 million, $10.4 million and $12.0 million. There was no excess tax benefits recognized in fiscal year 2015 due to the Company’s full valuation allowance. The Company recognized related excess tax benefits of $0.5 million and $0.1 million in fiscal years 2014 and 2013.

There was no gross benefit of tax deductions recognized in fiscal year 2015 due to the Company’s full valuation allowance. The Company included as part of cash flows from financing activities a gross benefit of tax deductions of $0.5 million and $0.2 million in fiscal years 2014 and 2013 related to stock-based compensation.

Stock Incentive Plans

In November 2009, the Company’s board of directors adopted the 2010 Equity Incentive Plan (the “2010 Incentive Plan”) and the Company’s stockholders approved the 2010 Incentive Plan in January 2010. The 2010 Incentive Plan became effective upon the completion of the IPO of the Company’s common stock in February 2010. Awards granted after January 2008 but before the adoption of the 2010 Incentive Plan continue to be governed by the terms of the 2008 Equity Incentive Plan (the “2008 Plan”). All outstanding stock awards granted before January 2008 continue to be governed by the terms of the Company’s amended and restated 1999 Equity Incentive Plan (the “1999 Plan”).

The 2010 Incentive Plan provides for the grant of incentive stock options (“ISOs”), nonstatutory stock options (“NQSOs”), restricted stock, restricted stock units (“RSUs”), stock appreciation rights, performance-based stock awards and other forms of equity compensation, as well as for the grant of performance cash awards. The Company may issue ISOs only to its employees. NQSOs and all other awards may be granted to employees, including officers, nonemployee directors and consultants.

To date, the Company has issued ISOs, NQSOs, RSUs and performance-based stock awards under the 2010 Incentive Plan. ISOs and NQSOs are generally granted to employees with an exercise price equal to the market price of the Company’s common stock at the date of grant. Stock options granted to employees generally have a contractual term of seven years and vest over four years of continuous service, with 25 percent of the stock options vesting on the one-year anniversary of the date of grant and the remaining 75 percent vesting in equal monthly installments over the three year period thereafter. Restricted stock units granted to employees prior to fiscal year 2013 generally vest over five years of continuous service, with 15 percent of the restricted stock units vesting on the one-year anniversary of the date of grant, 60 percent vesting in equal quarterly installments over the following three years and the remaining 25 percent vesting in equal quarterly installments over the last year of the vesting period. Restricted stock units granted to employees starting in fiscal year 2013 generally vest over four years of continuous service, with 25 percent of the restricted stock units vesting on the one-year anniversary of the date of grant and 6.25% vesting quarterly thereafter for the next 12 quarters.

An aggregate of 11,411,822 shares of the Company’s common stock were reserved for issuance under the 2010 Incentive Plan as of June 30, 2015, and this amount will be increased by any outstanding stock awards that expire or terminate for any reason prior to their exercise or settlement. The number of shares of the Company’s common stock reserved for issuance is increased annually through July 1, 2019 by up to five percent of the total number of shares of the Company’s common stock outstanding on the last day of the preceding fiscal year. The maximum number of shares that may be issued under the 2010 Incentive Plan is 30,000,000. There were 9,348,679 shares available for issuance under the 2010 Incentive Plan as of June 30, 2015.

In November 2009, the Company’s board of directors adopted the 2010 Non-Employee Directors’ Stock Award Plan (the “Directors’ Plan”) and the stockholders approved the Directors’ Plan in January 2010. The Directors’ Plan became effective upon the completion of the Company’s IPO. The Directors’ Plan provides for the automatic grant of NQSOs and restricted stock units to non-employee directors and also provides for the discretionary grant of NQSOs and restricted stock units. Stock options granted to new non-employee directors vest in equal monthly installments over four years; annual stock option grants to existing directors vest in equal monthly installments over one year and the initial and annual RSU grants vest quarterly over a period of four years. Starting in fiscal year 2015, initial and annual RSU grants vest daily over a period of four years.

An aggregate of 2,047,770 shares of the Company’s common stock were reserved for issuance under the Directors’ Plan as of June 30, 2015. This amount is increased annually, by the sum of 200,000 shares and the aggregate number of shares of the Company’s common stock subject to awards granted under the Directors’ Plan during the immediately preceding fiscal year. There were 803,142 shares available for issuance under the Directors’ Plan as of June 30, 2015.

Valuation Assumptions

The Company estimates the fair value of stock option awards at the date of grant using the Black-Scholes option-pricing model. Options are granted with an exercise price equal to the fair value of the common stock as of the date of grant. The Company calculates the weighted average expected life of options using the simplified method pursuant to the accounting guidance for share-based payments as it does not have sufficient historical exercise experience. The Company estimates the expected volatility of its common stock based on its historical volatility over the stock option’s expected term. The Company has no history or expectation of paying dividends on its common stock. The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected term of the stock options.

The weighted average Black-Scholes model assumptions and the weighted average grant date fair value of stock options in fiscal years 2015, 2014 and 2013 were as follows:


	Fiscal Year Ended June 30,
	2015			2014			2013
Expected term (in years)		4.6			4.6			4.6
Expected volatility		46	%		48	%		54	%
Expected dividend yield		0.0	%		0.0	%		0.0	%
Risk-free interest rate		1.6	%		1.4	%		0.7	%
Grant date fair value	$	1.87		$	3.67		$	3.82

The fair value of restricted stock units is determined based on the closing price of the Company’s common stock on the grant date.

Compensation expense is amortized net of estimated forfeitures on a straight-line basis over the requisite service period of the stock-based compensation awards.

Stock Option Award Activity

The following table summarizes the stock option award activity under the Company’s stock incentive plans from June 30, 2013 to June 30, 2015:


	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at June 30, 2013		10,039,450		$	10.31		3.39	$	5,693,691

Granted		1,449,608			8.98
Exercised		(731,936	)		4.99
Forfeited		(790,175	)		10.75
Expired		(2,454,355	)		10.93

Outstanding at June 30, 2014		7,512,592		$	10.32		3.27	$	225,182

Granted		453,608			4.65
Exercised		(211,878	)		4.60
Forfeited		(292,815	)		9.92
Expired		(1,583,066	)		10.46

Outstanding at June 30, 2015		5,878,441		$	10.07		2.88	$	950,759

Vested and expected-to-vest at June 30, 2015 ⁽¹⁾		5,757,585		$	10.13		2.82	$	888,953

Vested and exercisable at June 30, 2015		4,921,713		$	10.52		2.44	$	484,367

⁽¹⁾	The expected-to-vest options are the result of applying the pre-vesting forfeiture assumption to total outstanding options.

The following table summarizes additional information regarding outstanding and exercisable stock options at June 30, 2015:


	Options Outstanding						Options Exercisable
Range or Exercise Prices	Number of Shares		Weighted Average Remaining Contractual Term		Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price
$3.91-$5.94		677,001		5.96	$	5.06		307,732	$	4.90
$5.96-$9.00		476,045		3.34	$	7.50		397,419	$	7.48
$9.01-$9.01		798,014		0.99	$	9.01		798,014	$	9.01
$9.23-$9.55		959,877		4.31	$	9.47		642,124	$	9.43
$9.64-$9.91		655,205		3.58	$	9.68		496,196	$	9.69
$10.28-$10.28		631,536		0.08	$	10.28		631,536	$	10.28
$10.34-$11.67		1,006,268		2.54	$	11.32		974,197	$	11.31
$12.43-$15.60		181,000		3.84	$	14.19		181,000	$	14.19
$16.89-$16.89		104,295		1.74	$	16.89		104,295	$	16.89
$19.00-$19.00		389,200		1.36	$	19.00		389,200	$	19.00

$3.91-$19.00		5,878,441		2.88	$	10.07		4,921,713	$	10.52

The following table summarizes the total intrinsic value, the cash received and the actual tax benefit of all options exercised during fiscal years 2015, 2014 and 2013:


	Fiscal Year Ended June 30,
	2015		2014		2013
Intrinsic value	$	131	$	1,875	$	423
Cash received		975		3,652		457
Tax benefit		—		—		113

As of June 30, 2015, there was $2.6 million of total unrecognized compensation expense related to unvested stock options which is expected to be recognized over a weighted average period of 2.07 years.

Restricted Stock Unit Activity

The following table summarizes the restricted stock unit activity under the Company’s stock incentive plans from June 30, 2013 to June 30, 2015:


	Shares			Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at June 30, 2013		1,660,209		$	9.70		1.47	$	14,328

Granted		1,049,276			9.11
Vested		(650,254	)		7.81
Forfeited		(411,894	)		9.57

Outstanding at June 30, 2014		1,647,337		$	10.10		1.32	$	9,077

Granted		3,443,278			5.26
Vested		(606,209	)		5.11
Forfeited		(751,776	)		7.04

Outstanding at June 30, 2015		3,732,630		$	7.06		1.32	$	24,064

As of June 30, 2015, there was $14.8 million of total unrecognized compensation expense related to restricted stock units which is expected to be recognized over a weighted average period of 2.84 years.