STOCK BASED COMPENSATION
 12 Months Ended
Jun. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION
Stock-Based Compensation Plans
2010 Equity Incentive Plan
In March 2010, the Company’s Board of Directors and stockholders approved the 2010 Equity Incentive Plan (the “2010 Plan”). The 2010 Plan replaced the 2005 Equity Incentive Plan (the “2005 Plan”), and no further awards will be granted pursuant to the 2005 Plan. Under the terms of the 2010 Plan, nonstatutory stock options, stock appreciation rights, restricted stock, and restricted stock units (“RSUs”) may be granted to employees or non-employee service providers. Incentive stock options may be granted only to employees.
The maximum aggregate number of shares that may be awarded under the 2010 Plan as of June 30, 2015 was 8,000,000 shares, plus any shares subject to stock options or similar awards granted under the 2005 Plan that expire or otherwise terminate without having been exercised in full and shares issued pursuant to awards granted under the 2005 Plan that are forfeited to (but not repurchased by) the Company.
The 2010 Plan is administered by the Company's Board of Directors or a committee of the Company’s Board of Directors. Subject to the terms and conditions of the 2010 Plan, the administrator has the authority to select the persons to whom awards are to be made, to determine the number of shares to be subject to awards and the terms and conditions of awards, and to make all other determinations and to take all other actions necessary or advisable for the administration of the 2010 Plan. The administrator is also authorized to adopt, amend or rescind rules relating to administration of the 2010 Plan. Options and RSUs generally vest over a four year period from the date of grant and generally expire five to ten years from the date of grant. The terms of the 2010 Plan provide that an option price shall not be less than 100% of fair market value on the date of grant.
2005 Equity Incentive Plan
With the adoption of the 2010 Plan, no additional awards may be granted under the 2005 Plan. In February 2005, the Company’s Board of Directors and the stockholders approved the 2005 Plan, which was amended and restated in March 2006. The 2005 Plan provided for the issuance of stock options, restricted stock and stock bonuses to employees, consultants, advisors, directors and officers of the Company. The terms of the options granted under the 2005 Plan were determined at the time of grant. The Company made use of different vesting schedules through fiscal 2009, but subsequent new grants generally vested as to 25% on the first anniversary of the date of grant and monthly thereafter over the next three years and generally have a term of 10 years from the date of grant.
As of June 30, 2015, the Company had 9,993,423 authorized shares available for future issuance under all of its stock incentive plans.
Stock-based Compensation
The following table shows total stock-based compensation expense included in the Consolidated Statements of Operations and Comprehensive Income for fiscal 2015, 2014 and 2013 (in thousands):
 
Years Ended Years Ended June 30,
 
2015

2014
 
2013
Cost of sales
$
601

 
$
590

 
$
446

Research and development
2,854

 
2,423

 
1,433

Sales, general and administrative
1,537

 
1,893

 
1,497

 
$
4,992


$
4,906

 
$
3,376


Stock Options
The following is a summary of option activity for the Company’s stock incentive plans for fiscal 2015, 2014 and 2013:
 
Common Stock Options Outstanding
 
Number
of Shares
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life (Years)
 
Aggregate
Intrinsic
Value
 
 
 
 
 
 
 
(In thousands)
Balance, June 30, 2012
3,347,445

 
$
1.45

 
6.62
 
$
42,920

Granted
683,500

 
11.29

 
 
 
 
Exercised
(266,558
)
 
2.39

 
 
 
 
Forfeitures and cancellations
(150,125
)
 
5.68

 
 
 
 
Balance, June 30, 2013
3,614,262

 
$
3.07

 
6.17
 
$
52,330

Exercised
(849,635
)
 
2.46

 
 
 
 
Forfeitures and cancellations
(107,485
)
 
10.55

 
 
 
 
Balance, June 30, 2014
2,657,142

 
$
2.96

 
5.11
 
$
112,215

Exercised
(299,034
)
 
$
5.64

 
 
 
 
Forfeitures and cancellations
(56,964
)
 
$
12.14

 
 
 
 
Balance, June 30, 2015
2,301,144

 
$
2.38

 
3.82
 
$
67,969

Vested and expected to vest as of June 30, 2015
2,295,811

 
$
2.36

 
3.81
 
$
67,860

Vested and exercisable as of June 30, 2015
2,167,482

 
$
1.83

 
3.60
 
$
65,224


Additional information regarding options outstanding as of June 30, 2015 is as follows (in thousands, except weighted average exercise price amounts and contractual life):
 
 
Options Outstanding
 
 
 
Options Exercisable
Range of Exercise Prices
 
Number of
Options
 
Weighted
Average
Remaining
Contractual
Life (Years)
 
Weighted
Average
Exercise
Price
 
Number of
Options
 
Weighted
Average
Exercise
Price
$0.01 - $1.91
 
1,654,160

 
2.76
 
$
0.05

 
1,654,160

 
$
0.05

$1.92 - $10.76
 
292,352

 
5.53
 
4.49

 
291,828

 
4.49

$10.77 - $11.74
 
260,250

 
7.37
 
10.77

 
161,496

 
10.77

$11.75 - $18.48
 
87,788

 
7.32
 
13.17

 
54,377

 
13.29

$18.49 - $19.98
 
3,907

 
6.47
 
18.55

 
3,301

 
18.55

$19.99 - $26.28
 
2,687

 
5.48
 
21.55

 
2,320

 
21.55

$0.01 – $26.28
 
2,301,144

 
3.82
 
$
2.38

 
2,167,482

 
$
1.83


During fiscal 2015 and 2014 and 2013, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $9.2 million, $30.5 million, and $3.4 million, respectively, as determined as of the date of option exercise.

As of June 30, 2015, the Company had unrecognized compensation cost of $695,000 related to stock options which the Company expects to recognize over a weighted-average period of 1.4 years. Future option grants will increase the amount of compensation expense to be recorded in these periods.











The Company estimates the fair value of employee stock options using the Black-Scholes option pricing model. The fair value of employee stock options is being amortized on a straight-line basis over the requisite service period of the awards. The Company did not grant any stock options during fiscal 2015 or fiscal 2014. For fiscal 2013 the fair value of employee stock options was estimated using the following weighted average assumptions:
 
 
Year Ended June 30, 2013
Expected term
 
6.1 years

Expected volatility
 
52
%
Risk-free interest rate
 
0.9
%
Expected dividend yield
 
—

Weighted average grant date fair value
 
$
5.57


Expected term. Expected term represents the period that the Company’s stock-based awards are expected to be outstanding. As the Company has limited historical option exercise data, the expected term of the stock options granted to employees was calculated based on the simplified method. Under the simplified method, the expected term is equal to the average of an option’s weighted-average vesting period and its contractual term. The Company is permitted to continue using the simplified method until sufficient information regarding exercise behavior, such as historical exercise data or exercise information from external sources, becomes available.
Expected volatility. The expected volatility was based on the historical stock volatilities of a group of publicly listed comparable companies over a period equal to the expected terms of the options, as the Company does not have any trading history to use the volatility of its common stock.
Expected dividend yield. Although the Company paid a special cash dividend during fiscal 2013, the Company does not currently plan to pay dividends on its common stock.

Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the option’s expected term.
Fair value of common stock. The Company’s common stock began trading on the NASDAQ Global Select Market on October 14, 2011, upon its initial public offering. The fair value of the Company’s common stock is determined using the market price of the Company’s common stock as of the date of grant. Prior to October 14, 2011, the fair value of the shares of common stock underlying the stock options has historically been the responsibility of and determined by the Company’s Board of Directors. Because there had been no public market for the Company’s common stock, its Board of Directors has determined fair value of the common stock at the time of grant of the option by considering a number of objective and subjective factors including independent third-party valuations of its common stock, operating and financial performance, the lack of liquidity of capital stock and general and industry specific economic outlook, amongst other factors.
Forfeiture rate. The Company estimates its forfeiture rate based on an analysis of its actual forfeitures and will continue to evaluate the adequacy of the forfeiture rate based on actual forfeiture experience, analysis of employee turnover behavior and other factors. The impact from a forfeiture rate adjustment will be recognized in full in the period of adjustment, and if the actual number of future forfeitures differs from that estimated, the Company may be required to record adjustments to stock-based compensation expense in future periods.
Cash received from stock option exercises during the fiscal 2015, 2014 and 2013 was $1.7 million, $2.1 million and $635,000, respectively.







Restricted Stock Units (“RSUs”)
The following table summarizes the activity of the RSUs made by the Company:
 
Number of Shares
 
Weighted Average Grant Date Fair Value
Non-vested RSUs, June 30, 2012
453,620

 
$
9.42

RSUs granted
656,500

 
14.11

RSUs vested
(70,512
)
 
14.14

RSUs canceled
(294,702
)
 
5.29

Non-vested RSUs, June 30, 2013
744,906

 
$
14.74

RSUs granted
209,032

 
37.87

RSUs vested
(170,197
)
 
15.59

RSUs canceled
(234,039
)
 
16.18

Non-vested RSUs, June 30, 2014
549,702

 
$
22.65

RSUs granted
182,865

 
32.47

RSUs vested
(182,507
)
 
21.27

RSUs canceled
(149,425
)
 
24.84

Non-vested RSUs, June 30, 2015
400,635

 
26.95


The intrinsic value of RSUs vested in fiscal 2015, 2014 and 2013 was $6.4 million, $6.1 million and $1.0 million, respectively. The total intrinsic value of all outstanding RSUs was $12.8 million as of June 30, 2015.
As of June 30, 2015, there was unrecognized compensation costs related to RSUs of $8.0 million which the Company expects to recognize over a weighted average period of 2.9 years.