8x8 2013 Annual Report Download - page 67

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The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the aggregate difference between the
closing stock price of the Company’s common stock on March 31, 2013 and the exercise price for in-the-money options) that
would have been received by the option holders if all in-the-money options had been exercised on March 31, 2013.
The total intrinsic value of options exercised in the years ended March 31, 2013, 2012 and 2011 was $3.3 million, $4.6 million
and $1.4 million, respectively. As of March 31, 2013, there was $7.4 million of unamortized stock-based compensation
expense related to unvested stock options and awards which is expected to be recognized over a weighted average period of
2.91 years.
Cash received from option exercises and purchases of shares under the Purchase Plans for the years ended March 31, 2013,
2012 and 2011 were $2.4 million, $3.1 million and $2.3 million, respectively. The total tax benefit attributable to stock options
exercised in the year ended March 31, 2013 was $49,000.
1996 Employee Stock Purchase Plan
The Company's 1996 Stock Purchase Plan (“Employee Stock Purchase Plan”) was adopted in June 1996 and became effective
upon the closing of the Company's initial public offering in July 1997. The Company suspended the Employee Stock Purchase
Plan in 2003 and reactivated the Employee Stock Purchase Plan in fiscal 2005. Under the Employee Stock Purchase Plan,
500,000 shares of common stock were initially reserved for issuance. At the start of each fiscal year, the number of shares of
common stock subject to the Employee Stock Purchase Plan increases so that 500,000 shares remain available for issuance.
During fiscal 2013, 2012 and 2011, 301,303, 358,166 and 489,501 shares, respectively, were issued under the Employee Stock
Purchase Plan. In May 2006, the Company’s board of directors approved a ten-year extension of the Employee Stock Purchase
Plan. Stockholders approved a ten-year extension of the Employee Stock Purchase Plan at the 2006 Annual Meeting of
Stockholders held September 18, 2006. The Employee Stock Purchase Plan is effective until 2017.
The Employee Stock Purchase Plan permits eligible employees to purchase common stock through payroll deductions at a
price equal to 85% of the fair market value of the common stock at the beginning of each two year offering period or the end of
a six month purchase period, whichever is lower. When the Employee Stock Purchase Plan was reinstated in fiscal 2005, the
offering period was reduced from two years to one year. The contribution amount may not exceed ten percent of an employee's
base compensation, including commissions, but not including bonuses and overtime. In the event of a merger of the Company
with or into another corporation or the sale of all or substantially all of the assets of the Company, the Employee Stock
Purchase Plan provides that a new exercise date will be set for each option under the plan which exercise date will occur before
the date of the merger or asset sale.
Assumptions Used to Calculate Stock-Based Compensation Expense
The fair value of each of the Company's option grants has been estimated on the date of grant using the Black-Scholes pricing
model with the following assumptions:
2013 2012 2011
Expected volatility 70% 72% 69%
Expected dividend yield - - -
Risk-free interest rate 0.5% to 0.8% 0.3% to 1.2% 1.2% to 2.0%
Weighted average expected option term 5.3 years 4.8 years 4.3 years
Weighted average fair value of options granted $ 3.32 $ 2.30 $ 1.45
Years Ended March 31,