The Company may grant 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 performance cash awards, under its 2010 Equity Incentive Plan (the “2010 Incentive Plan”). The Company may grant NQSOs and RSUs to non-employee directors under the 2010 Non-Employee Directors’ Stock Award Plan (the “Directors’ Plan”). Prior to fiscal year 2016, the Company granted RSUs with a service condition (“service-based RSUs”). In fiscal year 2016, the Company also began granting to employees RSUs with a market condition (“market-based RSUs”) that requires the Company’s stock price achieve a specified price above the grant date stock price before it can be eligible for service vesting conditions. In fiscal year 2019, the Company began granting to employees RSUs with a performance condition (“performance-based RSUs”) that vest variably subject to the achievement of certain revenue growth and adjusted EBITDA targets (“performance targets”). The Company evaluates the portion of the awards that are probable to vest quarterly until the performance targets are met. To date, the Company has issued ISOs, NQSOs, service-based RSUs, market-based RSUs and performance-based RSUs under its stock incentive plans.

As of March 31, 2022, 23,125,612 shares were reserved and 13,428,746 shares were available for issuance under the 2010 Incentive Plan; 4,598,838 shares were reserved and 2,163,769 shares were available for issuance under the Directors’ Plan.

The Company estimates the fair value of stock options at the date of grant using the Black-Scholes option-pricing model. Options are granted with an exercise price equal to the closing price of the Company’s common stock on the date of grant. The weighted-average Black-Scholes model assumptions for the three and nine months ended March 31, 2022 and 2021 were as follows:

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2022			2021			2022			2021
Expected term (in years)		3.5			3.5			4.4			4.4
Expected volatility		57	%		62	%		58	%		62	%
Expected dividend yield		—			—			—			—
Risk-free interest rate		1.3	%		0.2	%		0.9	%		0.3	%
Grant date fair value	$	4.61		$	10.76		$	8.35		$	5.99

The Company estimates the fair value of service-based RSUs and performance-based RSUs based on the closing price of the Company’s common stock on the grant date. As some of the components that comprise the performance targets have not been fully established, a grant date as defined by ASC 718 has not been determined. The Company will re-measure the compensation expense associated with the performance-based RSUs at each reporting date based on the closing price of the Company’s common stock at each reporting date until the grant date has been established. Compensation expense is amortized net of estimated forfeitures on a straight-line basis over the requisite service period of the stock-based compensation awards.

In October 2021, the Company adopted the 2021 Employee Stock Purchase Plan (the “2021 ESPP”), with 2,164,999 shares of common stock reserved for future issuance under the plan. The 2021 ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15% of their eligible compensation. The 2021 ESPP provides for consecutive offering periods that will typically have a duration of approximately 24 months in length, and each offering period is comprised of four purchase periods of approximately six months in length.

On each purchase date, eligible employees may purchase the Company’s common stock at a price per share equal to 85% of the lesser of (1) the fair market value of the common stock on the first trading day of each offering period, or (2) the fair market value of the common stock on the purchase date. A participant may purchase up to a maximum of 2,500 shares of the common stock during each purchase period, subject to a maximum of $25,000 worth of shares of the common stock in each calendar year (as determined under applicable tax rules). If the fair market value of the common stock on any purchase date is lower than it was on the first trading day of that offering period, participants will be automatically withdrawn from the current offering period and be immediately re-enrolled in a new offering period.

As of March 31, 2022, the Company has not issued any shares of common stock under the 2021 ESPP.

ESPP employee payroll contributions accrued as of March 31, 2022 were $0.2 million, and are included within accrued liabilities on the Company’s condensed consolidated balance sheet. Payroll contributions accrued as of March 31, 2022 will be used to purchase shares at the end of the current ESPP purchase period ending on August 24, 2022.

The fair value of the purchase rights for the ESPP are estimated on the date of grant using the Black-Scholes model with the following assumptions:


	Three Months Ended		Nine Months Ended
	March 31, 2022		March 31, 2022
Expected term (in years)	0.5 - 2.0		0.5 - 2.0
Expected volatility	48% - 64%		48% - 64%
Expected dividend yield		—		—
Risk-free interest rate	0.3% - 1.0%		0.3% - 1.0%
Grant date fair value	$3.72 - $5.33		$3.72 - $5.33