TeleNav 2014 Annual Report Download - page 105

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Table of Contents
The following table summarizes the stock-based compensation expense recorded for stock options, RSUs and restricted common stock
issued to employees and nonemployees (in thousands):
We generally use the Black-Scholes option-pricing model to determine the fair value of stock option awards. The determination of the fair
value of stock option 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 options 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.
We recognize the estimated stock-based compensation cost of RSUs and restricted common stock, net of estimated forfeitures, over the
vesting term. The estimated stock-based compensation cost is based on the fair value of our common stock on the date of grant.
At June 30, 2014, the total unrecognized stock-based compensation cost related to employee options was $3.2 million , net of estimated
forfeitures, and will be amortized over a weighted average period of 1.5 years. The total fair value of stock options that vested during fiscal
2014, 2013 and 2012 was $4.1 million , $4.9 million and $5.0 million , respectively. At June 30, 2014, the total unrecognized stock-based
compensation cost related to RSUs was $21.5 million , net of estimated forfeitures, and will be amortized over a weighted average period of 3.1
years. The total fair value of RSUs that vested during fiscal 2014, 2013 and 2012 was
$4.1 million , $298,000 and $139,000 , respectively. At
June 30, 2014, the total unrecognized stock-based compensation cost
F-23
Fiscal Year Ended June 30,
2014 2013 2012
Cost of revenue
$
100
$
149
$
91
Research and development
4,489
3,509
2,509
Selling and marketing
3,306
2,290
1,168
General and administrative
3,640
2,699
1,354
Total stock-based compensation expense
$
11,535
$
8,647
$
5,122
Fiscal Year Ended June 30,
2014
2013
2012
Stock option awards
$
3,930
$
5,837
$
4,882
RSU awards
5,781
1,491
240
Restricted common stock
1,824
1,319
—
Total stock-based compensation expense
$
11,535
$
8,647
$
5,122
Fiscal Year Ended June 30,
2014
2013
2012
Expected volatility
62
%
72
%
64
%
Expected term (in years)
4.45
4.79
4.50
Risk-free interest rate
1.44
%
0.67
%
0.77
%
Dividend yield
—
—
—