STOCK-BASED COMPENSATION

6 Months Ended

Sep. 30, 2012

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

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

STOCK-BASED COMPENSATION

The following table summarizes the amount of stock-based compensation included in the Condensed consolidated statements of operations:

	Three Months Ended						Six Months Ended
	September 30,						September 30,
(in thousands)	2012			2011			2012			2011
Cost of revenues	$	526		$	559		$	1,122		$	1,105
Research, development and engineering	1,256			1,028			2,380			1,975
Selling, general and administrative	3,080			2,921			5,980			5,608
Stock-based compensation included in operating expenses	4,336			3,949			8,360			7,583
Total stock-based compensation	4,862			4,508			9,482			8,688
Income tax benefit	(1,532		)	(1,441		)	(2,914		)	(2,723		)
Total stock-based compensation, net of tax	$	3,330		$	3,067		$	6,568		$	5,965

Stock Options

The following is a summary of the Company’s stock option activity during the six months ended September 30, 2012:

	Options Outstanding
	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
	(in thousands)				(in years)	(in thousands)
Outstanding at March 31, 2012	3,304		$	26.47
Options granted	266		$	33.40
Options exercised	(390	)	$	24.11
Options forfeited or expired	(140	)	$	34.91
Outstanding at September 30, 2012	3,040		$	27.00	3.7	$	26,109
Vested and expected to vest at September 30, 2012	3,005		$	26.91	3.6	$	26,038
Exercisable at September 30, 2012	2,200		$	24.45	2.8	$	24,183

The total intrinsic value of options exercised during the six months ended September 30, 2012 and 2011 was $4.5 million and $11.7 million, respectively.  Intrinsic value is defined as the amount by which the fair value of the underlying stock exceeds the exercise price at the time of option exercise. The total cash received as a result of stock option exercises during the six months ended September 30, 2012 was $9.4 million.

As of September 30, 2012, total unrecognized compensation cost related to unvested stock options was $7.9 million, which is expected to be recognized over a weighted average period of 2.0 years.

Restricted Stock

Restricted stock consists of awards of restricted stock and restricted stock units ("RSUs"). The following is a summary of the Company’s restricted stock activity during the six months ended September 30, 2012:

	Number of Shares		Weighted Average Grant Date Fair Value
	(in thousands)
Non-vested at March 31, 2012	815		$	33.37
Restricted stock granted	552		$	32.05
Restricted stock vested	(150	)	$	32.80
Restricted stock forfeited	(51	)	$	31.73
Non-vested at September 30, 2012	1,166		$	32.89

The weighted average grant-date fair value of awards of restricted stock is based on the quoted market price of the Company's common stock on the date of grant. The weighted average grant-date fair value of restricted stock granted during the six months ended September 30, 2012 and 2011 was $32.05 and $36.36, respectively. The total fair value of restricted stock that vested during the six months ended September 30, 2012 and 2011 was $4.9 million and $1.9 million, respectively.

As of September 30, 2012, total unrecognized compensation cost related to unvested restricted stock was $26.5 million, which is expected to be recognized over a weighted average period of 2.8 years.  

Restricted stock granted for the six months ended September 30, 2012 includes 74,298 shares of RSUs granted under a special stock inducement plan to Tonalite employees in connection with the Company's acquisition of all the equity interests in Tonalite during the three months ended September 30, 2012. The RSUs vest annually over four years, subject to the continued employment of the RSU holder on the vesting date. As future services are required, the fair value of the restricted stock units was not included in the purchase price accounting for the acquisition and will be expensed over the post-acquisition requisite service period.

Valuation Assumptions

The Company estimates the fair value of stock options and Employee Stock Purchase Plan (“ESPP”) shares using a Black-Scholes option valuation model.  The fair value of stock options granted, and purchase rights under the ESPP, during the respective periods, are estimated on the date of grant using the following weighted average assumptions:

	Three Months Ended						Six Months Ended
	September 30,						September 30,
Employee Stock Options	2012			2011			2012			2011
Expected volatility	43.5		%	44.7		%	42.2		%	44.4		%
Risk-free interest rate	0.5		%	0.6		%	0.6		%	1.2		%
Expected dividends	1.3		%	0.6		%	1.3		%	0.6		%
Expected life (in years)	4.3			4.0			4.3			4.0
Weighted-average grant date fair value	$	10.84		$	10.85		$	10.43		$	12.18
ESPP
Expected volatility	38.4		%	38.7		%	38.4		%	38.7		%
Risk-free interest rate	0.1		%	0.1		%	0.1		%	0.1		%
Expected dividends	1.1		%	0.6		%	1.1		%	0.6		%
Expected life (in years)	0.5			0.5			0.5			0.5
Weighted-average grant date fair value	$	8.95		$	8.00		$	8.95		$	8.00

The Company recognizes the grant-date fair value of stock-based compensation as compensation expense using the straight-line attribution approach over the service period for which the stock-based compensation is expected to vest.