Stock-Based Compensation

3 Months Ended

Jun. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

Stock-based compensation cost is measured at the grant date based on the fair value of the award. The Company uses the Black-Scholes model to value stock-based compensation for options and employee stock purchase rights under the ESPP, and the fair market value of the Company's common stock for RSUs. The MSUs were valued using the Monte Carlo pricing model, which uses the Company's stock price, the Index value, expected volatilities of the Company's stock price and the Index, correlation coefficients and risk free interest rates to determine the fair value. The Black-Scholes model determines the fair value of share-based payment awards based on the stock price on the date of grant and is affected by assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the Company’s stock price, volatility over the term of the awards and actual and projected employee stock option exercise behaviors. Option-pricing models were developed for use in estimating the value of traded options that have no vesting or hedging restrictions and are fully transferable. Although the fair value of stock options granted by the Company is estimated by the Black-Scholes model, the estimated fair value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction.

The Company did not grant options or employee stock purchase rights during the three months ended June 30, 2014 and 2013.

The weighted average grant-date fair value per share of the RSUs awarded was $8.85 and $7.03 during the three months ended June 30, 2014 and 2013, respectively. The weighted average fair value per share was calculated based on the fair market value of the Company’s common stock on the respective grant dates.

Effective the fourth quarter of fiscal 2014, the Company revised its estimated forfeiture rate used in determining the amount of stock-based compensation from 6.7% to 5.8% as a result of a decreasing rate of forfeitures in recent periods, which the Company believes is indicative of the rate it will experience during the remaining vesting period of currently outstanding unvested grants.

The following table summarizes stock-based compensation expense related to stock options and RSUs (in thousands):

	Three Months Ended
	June 30,
	2014		2013
Stock-based compensation expense by type of grant:
Stock options	$	414	$	602
Restricted stock units	4,784		3,124
Total stock-based compensation	5,198		3,726
Stock-based compensation (capitalized to) expensed from inventory	18		(12		)
Total stock-based compensation expense	$	5,216	$	3,714

The following table summarizes stock-based compensation expense as it relates to the Company’s Condensed Consolidated Statement of Operations (in thousands):

	Three Months Ended
	June 30,
	2014		2013
Stock-based compensation expense by cost centers:
Cost of revenues	$	29	$	108
Research and development	3,271		1,798
Selling, general and administrative	1,898		1,820
Total stock-based compensation	$	5,198	$	3,726
Stock-based compensation (capitalized to) expensed from inventory	18		(12		)
Total stock-based compensation expense	$	5,216	$	3,714

As of June 30, 2014, the amount of unrecognized stock-based compensation cost, net of estimated forfeitures, related to unvested stock options and unvested RSUs was $30.8 million which will be recognized over a weighted average period of 2.4 years.