SHARE-BASED COMPENSATION

6 Months Ended

Sep. 28, 2012

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

3.  SHARE-BASED COMPENSATION

The following table summarizes the Company’s share-based compensation expense:

	Three-Month Periods Ended				Six-Month Periods Ended
	September 28, 2012		September 30, 2011		September 28, 2012		September 30, 2011
	(In thousands)
Cost of sales	$	1,058	$	2,293	$	2,515	$	4,307
Selling, general and administrative expenses	7,316		11,955		15,677		22,218
Total stock-based compensation expense	$	8,374	$	14,248	$	18,192	$	26,525

Total unrecognized compensation expense related to share options is $2.7 million, net of estimated forfeitures, and will be recognized over a weighted-average remaining vesting period of 2.3 years. As of September 28, 2012, the number of options outstanding and exercisable was 37.6 million and 36.4 million, respectively, at weighted-average exercise prices of $7.98 and $8.02 per share, respectively.

During the six-month period ended September 28, 2012, the Company granted 8.9 million unvested share bonus awards at an average grant date price of $6.79 per share, under its 2010 Equity Incentive Plan.  Of this amount, approximately 2.2 million represents the target amount of grants made to certain key employees whereby vesting is contingent on a certain market condition.  The number of shares that ultimately will vest are based on a measurement of Flextronics’s total shareholder return against the Standard and Poor’s (“S&P”) 500 Composite Index and will cliff vest after a period of three years, if such market conditions have been met. The number of shares issued can range from zero to 4.4 million.  The average grant-date fair value of these awards was estimated to be $7.64 per share and was calculated using a Monte Carlo simulation.  As of September 28, 2012, approximately 22.3 million of unvested share bonus awards were outstanding, of which vesting for 4.4 million is contingent on meeting the certain market condition above. The number of shares issued can range from zero to 7.6 million based on the achievement levels of the targeted market condition.

As of September 28, 2012, total unrecognized compensation expense related to unvested share bonus awards is $90.2 million, net of estimated forfeitures, and will be recognized over a weighted-average remaining vesting period of 2.9 years. Approximately $11.7 million of the total unrecognized compensation cost, net of estimated forfeitures, is related to awards whereby vesting is contingent on meeting a certain market condition, as discussed above.