Stockholders' Equity

9 Months Ended

Dec. 31, 2014

Equity [Abstract]

STOCKHOLDERS' EQUITY

STOCKHOLDERS’ EQUITY

Stock Options

The Company has granted stock options to employees and non-employee directors under several plans. These option plans include two stockholder-approved plans (1992 Stock Option Plan and 2011 Equity Incentive Plan) and one plan not approved by stockholders (2000 Equity Incentive Plan). Certain other outstanding options were assumed through the Company’s various acquisitions.

A summary of the Company's stock option activity and related information during the nine months ended December 31, 2014 is as follows:

	Number of Shares (thousands)		Weighted Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (millions)
Outstanding at the beginning of the year	2,409		$	10.06
Granted	—		—
Exercised	(54	)	6.32			$	0.2	(1	)
Cancelled	(473	)	13.22
Outstanding at the end of the period	1,882		$	9.37	2.0	$	0.1	(2	)
Vested and expected to vest at the end of the period	1,882		$	9.37	2.0	$	0.1	(2	)
Vested and exercisable at the end of the period	1,882		$	9.37	2.0	$	0.1	(2	)

(1) The aggregate pre-tax intrinsic value is calculated as the difference between the market value on the date of exercise and the exercise price of the shares.

(2) The aggregate pre-tax intrinsic value is calculated as the difference between the market value as of the end of the third quarter 2014 and the exercise price of the shares. The closing price of the Company’s common stock was $6.52 per share on December 31, 2014.

Restricted Stock Units ("RSUs")

The Company has granted RSUs to employees and non-employee directors pursuant to its 1992 Plan and 2011 Equity Incentive Plan. RSUs are share awards that, upon vesting, will deliver to the holder shares of the Company’s common stock. Generally, RSUs vest ratably on a quarterly basis over four years from the date of grant. For new employees hired, RSUs will generally vest on a quarterly basis over four years provided that no shares will vest during the first year of employment, at the end of which the shares that would have vested during that year will vest and the remaining shares will vest over the remaining 12 quarters.

In November 2013, Dr. Gopi was awarded 500,000 RSUs of which 200,000 RSUs were vested on the grant date and the remaining 300,000 RSUs will vest upon the attainment of certain specified X-Gene^TM and X-Weave®product commercialization goals. The grant-date fair value of these 300,000 performance-based RSUs was $3.3 million.

In May and November 2013 and May and October 2014, the Compensation Committee (the "Committee") authorized market-performance based RSUs ("MSUs"). The MSUs will be earned, if at all, based on the Company's Total Shareholder Return (“TSR”) compared to that of the SPDR S&P Semiconductor Index ("Index”) over a two-year performance period for half of the MSU award and a three-year performance period for the remaining half of the MSU award. The MSUs will vest between ranges of 0% and 150% based on the Company's relative TSR compared to the Index. Total grant-date fair value of these MSUs was $4.5 million.

In May 2014, the Committee authorized an annual incentive compensation plan with respect to fiscal 2015 (the “FY2015 Short-Term Incentive Plan”). The FY2015 Short-Term Incentive Plan will pay-out based on our actual performance as measured against two equally weighted financial measures: revenue and non-GAAPearnings per share. Non-GAAP net income (loss) is derived by excluding from net income (loss) the following items required by GAAP: stock-based compensation charges, amortization of purchased intangible assets, Veloce acquisition consideration, restructuring charges, impairment of marketable securities and cost method investments, income taxes effect due to reconciling items, and other one-time and/or non-cash items.Non-GAAP earnings per share is derived by dividing non-GAAP net income (loss) by the weighted average number of common shares outstanding during the applicable periods. The award payouts for each corporate financial measure range from 50% to 150% of the pre-established target level based on the Company's actual performance for fiscal 2015. Awards under the FY2015 Short-Term Incentive Plan will be payable, if at all, in fully vested shares of common stock on or about May 15, 2015.

RSU activity during the nine months ended December 31, 2014 is set forth below (in thousands):

	Number of Shares
Outstanding at the beginning of the year	6,105
Awarded	3,352
Vested	(1,279	)
Cancelled	(3,536	)
Outstanding at the end of the period	4,642

The weighted average remaining contractual term for the RSUs outstanding as of December 31, 2014 was 1.3 years.

As of December 31, 2014, the aggregate pre-tax intrinsic value of RSUs outstanding was $30.3 million which includes performance-based awards which are subject to milestone attainment. The aggregate pretax intrinsic values were calculated based on the closing price of the Company’s common stock of $6.52 on December 31, 2014.

The aggregate pre-tax intrinsic value of RSUs released during the nine months ended December 31, 2014 was $9.8 million. This intrinsic value represents the fair market value of the Company’s common stock on the date of release.

Employee Stock Purchase Plan

Under the Company's 2012 Employee Stock Purchase Plan, or ESPP, the Company reserved 1.8 million shares for issuance. In August 2014, the Company’s stockholders approved the proposal to reserve an additional 2.0 million shares under the ESPP. Under the terms of the ESPP, eligible employees are entitled to purchase common stock, on a semi-annual basis, at a purchase price equal to 85% of the fair market value of the common stock on the first or last day of the offering period, whichever is lower. During the nine months ended December 31, 2014 and 2013, 0.2 million and 0.3 million shares were issued under the ESPP, respectively. At December 31, 2014, 2.3 million shares were available for future issuance under the ESPP.