TeleNav 2013 Annual Report Download - page 94

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Table of Contents
We generally use the Black-Scholes option-pricing model to determine the fair value of stock-
based awards. The determination of the fair value
of stock-based awards on the date of grant is affected by the stock price as well as assumptions regarding a number of complex and subjective
variables. These variables include expected stock price volatility over the term of the awards, actual and projected employee stock option exercise
behaviors, risk-free interest rates and expected dividends. The weighted average assumptions used to value stock-based awards granted were as
follows:
Expected volatility . Due to the limited historical public market trading data for our common stock, the expected volatility used is based on the
historical volatility of our common stock as well as the common stock of various comparable companies. In evaluating similarity, we considered
factors such as industry, stage of a company’s life cycle, revenue and market capitalization.
Expected term . The expected term represents the period that our stock-based awards are expected to be outstanding. The expected term was
based on an analysis of our historical exercise and cancellation activity.
Risk-free interest rate . The risk-free rate is based on U.S. Treasury zero coupon issues with remaining terms similar to the expected term on
the options.
Dividend yield . We have never declared or paid any cash dividends on our common stock and do not plan to pay cash dividends in the
foreseeable future and, therefore, use an expected dividend yield of zero in the valuation model.
At June 30, 2013, the total unrecognized stock-based compensation cost related to employee options was $7.5 million , net of estimated
forfeitures, and will be amortized over a weighted average period of 2.3 years. The total fair value of stock options that vested during fiscal 2013,
2012, 2011, was $4.9 million , $5.0 million and $4.2 million , respectively. At June 30, 2013, the total unrecognized stock-based compensation cost
related to restricted stock units was $9.2 million , net of estimated forfeitures, and will be amortized over a weighted average period of 3.6
years. The
total fair value of restricted stock units that vested during fiscal 2013 and 2012 was $298,000 and $139,000 , respectively. No restricted stock units
vested during fiscal 2011. At June 30, 2013, the total unrecognized stock-based compensation cost related to restricted common stock issued in
connection with our acquisition of ThinkNear was $2.3 million and will be amortized over a weighted average period of 1.3 years. The total fair
value of restricted common stock that vested during fiscal 2013 was $1.3 million .
Shares reserved for future issuance
Common stock reserved for future issuance was as follows (in thousands):
F-21
Fiscal Year Ended June 30,
2013
2012
2011
Cost of revenue
$
149
$
91
$
97
Research and development
3,509
2,509
1,965
Selling and marketing
2,290
1,168
1,003
General and administrative
2,699
1,354
1,072
Total stock-based compensation expense
$
8,647
$
5,122
$
4,137
Fiscal Year Ended June 30,
2013
2012
2011
Expected volatility
72
%
64
%
56
%
Expected term (in years)
4.79
4.50
4.50
Risk-free interest rate
0.67
%
0.77
%
1.61
%
Dividend yield
—
—
—
June 30, 2013
Stock options outstanding
6,577
Restricted stock units outstanding
2,032
Available for future grants of stock options or restricted stock units
852
Total common shares reserved for future issuance
9,461