Stock-Based Compensation (Tables)

12 Months Ended

Jun. 29, 2014

Amounts recognized in the financial statements with respect to these plans for fiscal 2014, 2013 and 2012 are as follows:



	2014			2013			2012
	(in thousands)
Cost of stock-based payment plans during the period⁽¹⁾⁽²⁾	$	15,226		$	21,844		$	22,084
Amounts capitalized in inventory during the period	(427		)	(549		)	(527		)
Amounts recognized in income for amounts previously capitalized in inventory	458			507			612
Amounts charged against income, before income tax benefit	$	15,257		$	21,802		$	22,169
Amount of related income tax benefit recognized in income⁽³⁾	$	—		$	—		$	—


(1)	Includes approximately $4.8 million and $4.1 million of stock-based compensation related to the ServerEngines contingent consideration tied to future employment and related 2012 modification in fiscal 2013 and 2012, respectively.


(2)	Includes Cash-Settled Unit Awards of approximately $1.1 million and $1.3 million in fiscal 2014 and 2013, respectively classified as a liability since these awards are settled in cash and do not impact shareholders’ equity.


(3)	There was no tax benefit recognized in income in fiscal 2014, 2013 or 2012 due to the Company’s valuation allowance for deferred tax assets (see Note 14).

The assumptions used to compute the fair value of the compensatory element related to the Amended ESPP for fiscal 2014, 2013 and 2012 were:



	2014	2013	2012
Expected volatility	24% - 30%	35% - 45%	45%
Weighted average expected volatility	27%	39%	45%
Expected dividends	—%	—	—
Expected term (in years)	0.5	0.5	0.5
Weighted average expected term (in years)	0.5	0.5	0.5
Risk-free interest rate	0.05% - 0.08%	0.08% - 0.16%	0.06% - 0.14%

The assumptions used to compute the fair value of stock option grants under the Equity Incentive Plan for fiscal 2014, 2013 and 2012 were:



	2014	2013	2012
Expected volatility	37% - 42%	40% - 47%	45% - 47%
Weighted average expected volatility	39%	45%	46%
Expected dividends	—	—	—
Expected term (in years)	3.8 - 5.9	3.8 - 5.8	3.6 - 5.6
Weighted average expected term (in years)	4.6	4.6	4.4
Risk-free interest rate	1.07% - 2.04%	0.53% - 1.48%	0.67% - 1.22%

A summary of stock option activity under the plans for fiscal 2014 is presented below:



	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
						(in millions)
Options outstanding at June 30, 2013	4,220,262		$	12.28	2.47	$	0.6
Options granted	525,374		7.35
Options exercised	(94,898	)	4.35
Options expired	(1,721,281	)	15.37
Options forfeited	(117,538	)	7.65
Options outstanding at June 29, 2014	2,811,919		$	9.95	2.47	$	0.2
Options vested and expected to vest at June 29, 2014	2,785,309		$	9.99	2.43	$	0.2
Options exercisable at June 29, 2014	2,122,022		$	10.80	1.77	$	0.2

A summary of outstanding and unvested stock award activity for fiscal 2014 is presented below:



	Number of Shares		Weighted Average Grant Date Fair Value
Awards outstanding and unvested at June 30, 2013	3,413,522		$	7.74
Awards granted	2,562,867		7.45
Awards vested	(1,696,243	)	8.29
Awards forfeited	(681,012	)	7.63
Awards outstanding and unvested at June 29, 2014	3,599,134		$	7.29
Awards vested and expected to vest at June 29, 2014	3,158,034

Cash Settled Unit Awards

A summary of Cash-Settled Unit Award activity for fiscal 2014 is as follows:



	Number of Shares		Weighted Average Grant Date Fair Value
Awards outstanding and unvested at June 30, 2013	552,723		$	7.41
Awards granted	29,359		6.43
Awards vested	(190,301	)	7.47
Awards forfeited	(68,911	)	7.58
Awards outstanding and unvested at June 29, 2014	322,870		$	7.25
Awards vested and expected to vest at June 29, 2014	295,611