10. Stock‑Based Compensation

The Company issues new shares to fulfill the obligations under all of its stock‑based compensation awards. Such shares are subject to registration under applicable securities laws, including the rules and regulations promulgated by the Securities and Exchange Commission, unless an applicable exemption applies.

During the six months ended December 23, 2012, the Company granted an aggregate of 10,000 stock options to Company employees under its 2011 Performance Incentive Plan (the "2011 Plan"). Subject to the terms and conditions of the 2011 Plan and applicable award documentation, such awards generally vest and become exercisable in equal installments over each of the first three anniversaries of the date of grant, with a maximum award term of five years.

The following table summarizes the stock option activities for the six months ended December 23, 2012 (in thousands, except per share price data):

	Stock Option Shares			Weighted Average Option Exercise Price per Share		Weighted Average Grant Date Fair Value per Share		Aggregate Intrinsic Value
Outstanding, June 24, 2012		2,044		$	16.76		—	$	7,031
Granted		10		$	17.28	$	5.03		—
Exercised		(76	)	$	17.38		—		332
Expired or forfeited		(32	)	$	18.72		—		—
Outstanding, December 23, 2012		1,946		$	16.88		—	$	3,439

For the six months ended December 23, 2012 and December 25, 2011, the Company received $1.0 million and $1.8 million, respectively, for stock options exercised. There were no tax benefits realized from issuance of stock-based awards for the three and six months ended December 23, 2012 and December 25, 2011, respectively.

INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10. Stock-Based Compensation (Continued)

During the six months ended December 23, 2012, the Company granted 20,100 restricted stock units ("RSUs") to employees, and 61,227 RSUs to members of the Board of Directors, in each case under the 2011 Plan. The awards provided for vesting over a period of service, subject to the terms and conditions of the 2011 Plan and applicable award documentation. For the awards made to employees, the vesting of awards generally takes place in equal installments over each of the first three anniversaries of the date of grant. The awards made to members of the Board of Directors were made as part of the Board's annual director compensation program, under which the vesting of awards takes place generally on the first anniversary of the date of grant.

The following table summarizes the RSU activity for the six months ended December 23, 2012 (in thousands, except per share price data):

	Restricted Stock Units			Weighted Average Grant Date Fair Value per Share		Aggregate Intrinsic Value
Outstanding, June 24, 2012		2,905		$	21.72	$	57,932
Granted		81		$	17.57		—
Vested		(207	)	$	19.85	$	3,786
Forfeited		(287	)	$	20.26		—
Outstanding, December 23, 2012		2,492		$	21.90	$	44,474

The Company's stock based compensation plans and award documentation permit the reduction of a grantee's RSUs for purposes of settling a grantee's income tax obligation. During the six months ended December 23, 2012, the Company withheld RSUs representing 54,642 underlying shares to fund grantees' income tax obligations.

Additional information relating to the Company's stock based compensation plans, including employee stock options and RSUs (including RSUs with performance based and market-based vesting criteria) at December 23, 2012 and June 24, 2012 is as follows (in thousands):

	December 23, 2012		June 24, 2012
Outstanding options exercisable		1,707		1,749
Options and RSUs available for grant		8,836		8,505
Total reserved common stock shares for stock option plans		13,274		13,454

For the three and six months ended December 23, 2012 and December 25, 2011, stock‑based compensation expense associated with the Company's stock options and RSUs (including RSUs with performance-based vesting and market-based vesting criteria) was as follows (in thousands):

	Three Months Ended				Six Months Ended
	December 23, 2012		December 25, 2011		December 23, 2012		December 25, 2011
Selling, general and administrative expense	$	2,858	$	2,276	$	6,018	$	4,931
Research and development expense		1,397		1,172		2,818		1,899
Cost of sales		1,123		814		2,281		1,139
Total stock‑based compensation expense	$	5,378	$	4,262	$	11,117	$	7,969

During the six months ended December 25, 2011, the Company recorded a net credit of $1.3 million to stock compensation expense relating to performance based awards, based on the determination that the achievement of certain of the performance goals that the Company in the prior year had determined were probable to be achieved were no longer considered probable.

INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10. Stock-Based Compensation (Continued)

The total unrecognized compensation expense for outstanding stock options and RSUs was $32.6 million as of December 23, 2012. The unrecognized compensation expense for the outstanding stock options and RSUs will generally be recognized over three years, except for one stock option award and one RSU award made to the Chief Executive Officer (the "CEO") during fiscal year 2008. The compensation expense for the CEO's awards made during fiscal year 2008 is being recognized over 5 years. The weighted average number of years to recognize the total compensation expense (including that of the CEO) for stock options and RSUs are 0.6 years and 2.0 years, respectively. As of December 23, 2012, the Company had no RSUs with performance (non-market) based vesting conditions outstanding.

The fair value of the Company stock options issued during the six months ended December 23, 2012 and December 25, 2011, was determined at the grant date using the Black‑Scholes option pricing model with the following weighted average assumptions:

	Six Months Ended
	December 23, 2012			December 25, 2011
Expected life	3.5 years			3.5 years
Risk free interest rate		0.36	%		0.37	%
Volatility		39.3	%		48.0	%
Dividend yield		0.0	%		0.0	%