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Stock-Based Compensation
 3 Months Ended
Jun. 30, 2016
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stock-Based Compensation

Note 6. Stock-Based Compensation

The following table summarizes stock-based compensation expense by financial statement line item in the Company’s condensed consolidated statements of operations for the three months ended June 30, 2016 and 2015:

 

 

 

For the Three Months Ended June 30,

 

 

 

 

2016

 

 

 

2015

 

 

 

(in $000's)

 

Cost of product revenue

 

$

299

 

 

$

237

 

Research and development

 

 

1,255

 

 

 

931

 

Selling, general and administrative

 

 

6,843

 

 

 

3,631

 

 

 

$

8,397

 

 

$

4,799

 

Stock Options

The following table summarizes the stock option activity for the three months ended June 30, 2016:

 

 

 

 

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

 

Weighted

 

 

Average

 

 

Aggregate

 

 

 

 

 

 

 

Average

 

 

Remaining

 

 

Intrinsic

 

 

 

Options

 

 

Exercise

 

 

Contractual

 

 

Value

 

 

 

(in thousands)

 

 

Price

 

 

Term (years)

 

 

(in thousands)

 

Outstanding at beginning of period

 

 

2,244

 

 

$

20.55

 

 

 

5.19

 

 

 

 

 

Granted

 

 

110

 

 

 

99.65

 

 

 

 

 

 

 

 

 

Exercised

 

 

(197

)

 

 

14.10

 

 

 

 

 

 

 

 

 

Cancelled and expired

 

 

(3

)

 

 

46.63

 

 

 

 

 

 

 

 

 

Outstanding at end of period

 

 

2,154

 

 

$

25.12

 

 

 

5.42

 

 

$

181,299

 

Exercisable at end of period

 

 

1,657

 

 

$

16.00

 

 

 

4.48

 

 

$

154,565

 

Options vested and expected to vest at end of period

 

 

2,100

 

 

$

24.53

 

 

 

5.34

 

 

$

178,007

 

 

The aggregate intrinsic value of options exercised was $16.5 million for the three months ended June 30, 2016. The total fair value of options that vested during the three months ended June 30, 2016 was $3.0 million.

The remaining unrecognized stock-based compensation expense for unvested stock option awards at June 30, 2016 was approximately $9.2 million, net of forfeitures, and the weighted-average period over which this cost will be recognized is 2.6 years.

The Company estimates the fair value of each stock option granted at the grant date using the Black-Scholes option valuation model. The weighted average grant-date fair values and weighted average assumptions used in the calculation of fair value of options granted during the three months ended June 30, 2016 and 2015 was as follows:

 

 

 

For the Three Months Ended June 30,

 

 

 

 

2016

 

 

 

2015

 

Weighted average grant-date fair value

 

$

40.33

 

 

$

27.33

 

 

 

 

 

 

 

 

 

 

Valuation assumptions:

 

 

 

 

 

 

 

 

Risk-free interest rate

 

 

1.38

%

 

 

1.57

%

Expected option life (years)

 

 

4.13

 

 

 

4.15

 

Expected volatility

 

 

49.8

%

 

 

50.4

%

Restricted Stock Units

 

The following table summarized activity of restricted stock units for the three months ended June 30, 2016:

 

 

 

Number of

Shares

 

 

Weighted

Average

Grant Date

Fair Value

 

 

 

(in thousands)

 

 

(per share)

 

Restricted stock and restricted stock units at beginning of

   period

 

 

1,263

 

 

$

57.95

 

Granted

 

 

254

 

 

$

98.45

 

Vested

 

 

(373

)

 

$

32.40

 

Forfeited

 

 

(5

)

 

$

28.87

 

Restricted stock and restricted stock units at end of period

 

 

1,139

 

 

$

75.70

 

 

The remaining unrecognized compensation expense for outstanding restricted stock units, including performance and market-based awards, as of June 30, 2016 was $46.2 million and the weighted-average period over which this cost will be recognized is 2.6 years.

Performance-Based Awards

In May 2016, performance-based awards of restricted stock units for the potential issuance of up to 190,890 shares of common stock were issued to certain executive officers and employees, all of which vest upon achievement of prescribed service milestones by the award recipients and performance milestones by the Company. As of June 30, 2016, the Company is recognizing compensation expense based on the probable outcome related to the prescribed performance targets on the outstanding awards.

In June 2011, performance-based awards of restricted stock units for the potential issuance of 100,000 shares of common stock was issued to a certain senior executive officer of the Company that would vest upon achievement of prescribed service milestones by the award recipient and performance milestones by the Company.  As of June 30, 2016, the Company has met the prescribed milestones for 50,000 shares of this award.  The Company modified the performance condition on the 50,000 remaining restricted stock units that were related to this performance award in March 2014 and December 2015, all of which will vest upon achievement of a prescribed service milestone by the award recipients and a performance milestone by the Company.  The Company believes that it is probable that the prescribed performance milestones will be met and the compensation expense is being recognized accordingly.