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Equity Compensation | 12 Months Ended
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Mar. 29, 2014
Equity Compensation [Abstract] |
Equity Compensation | 1 2. Equity Compensation T he Company is currently granting equity awards from the 2006 Stock Incentive Plan (the “Plan”), which was approved by stockholders in July 2006. The Plan provides for granting of stock options, restricted stock awards, performance awards, phantom stock awards, and bonus stock awards, or any combination of the foregoing. To date, the Company has granted stock options, restricted stock awards, and phantom stock awards (also called restricted stock units) under the Plan. Stock options generally vest between zero and four years, and are exercisable for a period of ten years from the date of grant. Generally, restricted stock awards are subject to vesting schedules up to four years. Restricted stock units are generally subject to vesting from one to three years, depending upon the terms of the grant. T he following table summarizes the activity in total shares available for grant (in thousands):
|  | Shares
|  | Available for
|  | Grant
Balance, March 26, 2011 |  | 8,175
Plans terminated |  | (34)
Granted |  | (2,049)
Forfeited |  | 165
Balance, March 31, 2012 |  | 6,257
Plans terminated |  | -
Granted |  | (1,600)
Forfeited |  | 468
Balance, March 30, 2013 |  | 5,125
Plans terminated |  | -
Granted |  | (1,785)
Forfeited |  | 207
Balance, March 29, 2014 |  | 3,547
Stock Compensation Expense T he following table summarizes the effects of stock-based compensation on cost of goods sold, research and development, sales, general and administrative, pre-tax income, and net income after taxes for options granted under the Company’s equity incentive plans (in thousands, except per share amounts):
| Fiscal Years Ended
|  | March 29, 2014 |  |  | March 30, 2013 |  |  | March 31, 2012
Cost of sales | $ | 864 |  | $ | 751 |  | $ | 398
Research and development |  | 10,392 |  |  | 10,549 |  |  | 5,590
Sales, general and administrative |  | 11,818 |  |  | 10,195 |  |  | 6,190
Effect on pre-tax income |  | 23,074 |  |  | 21,495 |  |  | 12,178
Income Tax Benefit |  | (8,445) |  |  | (106) |  |  | -
Total share-based compensation expense (net of taxes) |  | 14,629 |  |  | 21,389 |  |  | 12,178
Share-based compensation effects on basic earnings per share | $ | 0.50 |  | $ | 0.33 |  | $ | 0.19
Share-based compensation effects on diluted earnings per share |  | 0.48 |  |  | 0.32 |  |  | 0.18
Share-based compensation effects on operating activities cash flow |  | 14,629 |  |  | 21,389 |  |  | 12,178
Share-based compensation effects on financing activities cash flow |  | 8,445 |  |  | 106 |  |  | -
T he total share based compensation expense included in the table above and which is attributable to restricted stock awards and restricted stock units was $18.6 million, $16.3 million, and $6.3 million, for fiscal years 2014, 2013, and 2012, respectively. As of March 29, 201 4, there was $37.5 million of compensation costs related to non-vested stock options, restricted stock awards, and restricted stock units granted under the Company’s equity incentive plans not yet recognized in the Company’s financial statements. The unrecognized compensation cost is expected to be recognized over a weighted average period of 1.21 years for stock options, 0.27 years for restricted stock awards, and 1.49 years for restricted stock units. Stock Option Awards W e estimated the fair value of each stock option grant on the date of grant using the Black-Scholes option-pricing model using a dividend yield of zero and the following additional assumptions:
| Year Ended
|  | March 29, 2014 |  |  | March 30, 2013 |  |  | March 31, 2012 |
Expected stock price volatility |  | 51.93 | - | 54.34 | % |  | 63.42 | % |  | 59.25 | - | 66.11 | %
Risk-free interest rate |  | 0.47 | - | 0.52 | % |  | 0.31 | % |  | 0.27 | - | 1.43 | %
Expected term (in years) |  | 2.46 | - | 2.61 |  |  | 2.46 |  |  | 2.32 | - | 3.82 |
T he Black-Scholes valuation calculation requires us to estimate key assumptions such as stock price volatility, expected term, risk-free interest rate and dividend yield. The expected stock price volatility is based upon implied volatility from traded options on our stock in the marketplace. The expected term of options granted is derived from an analysis of historical exercises and remaining contractual life of stock options, and represents the period of time that options granted are expected to be outstanding after becoming vested. The r isk-free interest rate reflects th e yield on zero-coupon U.S. Treasury securities for a period that is commensurate with the expected term assumption. Finally, we have never paid cash dividends, do not currently intend to pay cash dividends, and thus have assumed a zero percent dividend yield. U sing the Black-Scholes option valuation model, the weighted average estimated fair values of employee stock options granted in fiscal years 2014, 2013, and 2012, were $10.45, $20.43, $7.58, respectively. D uring fiscal year 2014, 2013, and 2012, we received a net $5.1 million, $12.0 million, and $4.1 million, respectively, from the exercise of 0.8 million, 1.7 million, and 0.6 million, respectively, stock options granted under the Company’s S tock Plan. T he total intrinsic value of stock options exercised during fiscal year 2014, 2013, and 2012, was $12.4 million, $48.6 million, and $7.6 million, respectively. Intrinsic value represents the difference between the market value of the Company’s common stock at the time of exercise and the strike price of the stock option. A s of March 29, 201 4, approximately 7.3 million shares of common stock were reserved for issuance under the Company’s S tock Plan. A dditional information with respect to stock option activity is as follows (in thousands, except per share amounts):
|  | Outstanding Options
|  |  |  |  | Weighted
|  |  |  |  | Average
|  | Number |  |  | Exercise Price
Balance, March 26, 2011 |  | 6,181 |  | $ | 7.63
Options granted |  | 450 |  |  | 15.63
Options exercised |  | (593) |  |  | 6.88
Options forfeited |  | (67) |  |  | 7.70
Options expired |  | (67) |  |  | 15.68
Balance, March 31, 2012 |  | 5,904 |  | $ | 8.23
Options granted |  | 264 |  |  | 37.22
Options exercised |  | (1,746) |  |  | 6.88
Options forfeited |  | (144) |  |  | 12.52
Options expired |  | - |  |  | 20.25
Balance, March 30, 2013 |  | 4,278 |  | $ | 10.42
Options granted |  | 318 |  |  | 23.45
Options exercised |  | (834) |  |  | 6.12
Options forfeited |  | (10) |  |  | 15.33
Options expired |  | (27) |  |  | 19.52
Balance, March 29, 2014 |  | 3,725 |  | $ | 12.42
A dditional information with regards to outstanding options that are vesting, expected to vest, or exercisable as of March 29, 201 4 is as follows (in thousands, except years and per share amounts):
|  |  |  |  | Weighted |  | Weighted Average |  |  |
|  | Number of |  |  | Average |  | Remaining Contractual |  |  | Aggregate
|  | Options |  |  | Exercise price |  | Term (years) |  |  | Intrinsic Value
Vested and expected to vest |  | 3,676 |  | $ | 12.24 |  | 5.68 |  | $ | 32,674
Exercisable |  | 3,004 |  | $ | 9.54 |  | 5.07 |  | $ | 31,823
I n accordance with U.S. GAAP, stock options outstanding that are expected to vest are presented net of estimated future option forfeitures, which are estimated as compensation costs are recognized. Options with a fair value of $4.8 million, $4.8 million, and $6.3 million, became vested during fiscal years 2014, 2013, and 2012, respectively. T he following table summarizes information regarding outstanding and exercisable options as of March 29, 201 4 (in thousands, except per share amounts):
|  | Options Outstanding |  | Options Exercisable
|  |  |  | Weighted Average |  |  |  |  |  |  |  |
|  |  |  | Remaining |  | Weighted |  |  |  | Weighted
|  |  |  | Contractual Life |  | Average Exercise |  | Number |  | Average
Range of Exercise Prices |  | Number |  | (years) |  | Price |  | Exercisable |  | Exercise Price
$2.82 - $5.53 |  | 502 |  | 4.03 |  | $ | 5.16 |  | 502 |  | $ | 5.16
$5.55 - $5.55 |  | 943 |  | 5.50 |  |  | 5.55 |  | 943 |  |  | 5.55
$5.66 - $7.87 |  | 701 |  | 3.21 |  |  | 7.27 |  | 701 |  |  | 7.27
$8.06 - $16.25 |  | 831 |  | 6.74 |  |  | 15.21 |  | 616 |  |  | 15.10
$16.28 - $24.14 |  | 499 |  | 8.30 |  |  | 22.03 |  | 154 |  |  | 19.46
$38.99 - $38.99 |  | 249 |  | 8.52 |  |  | 38.99 |  | 88 |  |  | 38.99
|  | 3,725 |  | 5.72 |  | $ | 12.42 |  | 3,004 |  | $ | 9.54
As of March 29, 2014 and March 3 0, 201 3, the number of options exercisable was 3.0 million and 3.2 million, respectively. Restricted Stock Awards T he Company periodically grants restricted stock awards (“RSA’s”) to select employees. The grant date for these awards is equal to the measurement date and the awards are valued as of the measurement date and amortized over the requisite vesting period, which is no more than four years. Each full value award, including RSA’s, reduces the total shares available for grant under the Plan at a rate of 1.5 shares per RSA granted. As of March 29, 201 4, approximately 0.1 million shares attributable to RSA awards were reserved for issuance under the Plan, which includes the additional shares associated with this full value multiplier. A summary of the activity for RSA’s in fiscal year 2014, 2013, and 2012, is presented below (in thousands, except per share amounts):
|  |  |  | Weighted
|  |  |  | Average
|  |  |  | Grant Date
| Number of |  |  | Fair Value
| Shares |  |  | (per share)
March 26, 2011 | 45 |  | $ | 7.21
Granted | 49 |  |  | 15.31
Vested | (54) |  |  | 14.57
Forfeited | - |  |  | -
March 31, 2012 | 40 |  |  | 7.19
Granted | 27 |  |  | 28.24
Vested | (62) |  |  | 15.45
Forfeited | - |  |  | -
March 30, 2013 | 5 |  |  | 17.28
Granted | - |  |  | -
Vested | - |  |  | -
Forfeited | - |  |  | -
March 29, 2014 | 5 |  | $ | 17.28
The aggregate intrinsic value of RSA’s outstanding as of March 29, 2014 was $98 thousand. RSA’s with a fair value of $951 thousand and $637 thousand became vested during fiscal years 2013 and 2012, respectively. No RSA’s became vested during fiscal year 2014. Restricted Stock Units Commencing in fiscal year 2011, the Company began granting restricted stock units (“RSU’s”) to select employees. These awards are valued as of the grant date and amortized over the requisite vesting period. Generally, RSU’s vest 100 percent on the first to third anniversary of the grant date depending on the vesting specifications. Each full value award, including RSU’s, reduces the total shares available for grant under the 2006 option plan at a rate of 1.5 shares per RSU granted. As of March 29, 201 4, approximate ly 3.9 million sh ares attributable to RSU awards were reserved for issuance under the Plan, which includes the additional shares associated with this full value award multiplier. A summary of the activity for RSU’s in fiscal year 2014, 2013, and 2012 is presented below (in thousands, except year and per share amounts):
|  |  |  | Weighted
|  |  |  | Average
| Shares |  |  | Fair Value
March 26, 2011 | 620 |  | $ | 16.41
Granted | 1,017 |  |  | 16.59
Vested | - |  |  | -
Forfeited | (21) |  |  | 16.04
March 31, 2012 | 1,616 |  |  | 16.52
Granted | 864 |  |  | 37.26
Vested | (193) |  |  | 20.56
Forfeited | (216) |  |  | 21.46
March 30, 2013 | 2,071 |  |  | 23.66
Granted | 977 |  |  | 22.55
Vested | (626) |  |  | 17.71
Forfeited | (113) |  |  | 25.81
March 29, 2014 | 2,309 |  | $ | 25.26
The aggregate intrinsic value of RSU’s outstanding as of March 29, 2014 was $45.1 million. Additional information with regards to outstanding restricted stock units that are vesting or expected to vest as of March 29, 201 4, is as follows (in thousands, except year and per share amounts):
|  |  |  |  | Weighted |  | Weighted Average
|  |  |  |  | Average |  | Remaining Contractual
|  | Shares |  |  | Fair Value |  | Term (years)
Vested and expected to vest |  | 2,174 |  | $ | 25.26 |  | 1.46
RSU’s outstanding that are expected to vest are presented net of estimated future forfeitures, which are estimated as compensation costs are recognized. RSU’s with a fair value of $11.1 million and $3.8 million became vested during fiscal year s 2014 and 2013, respectively. No RSU’s became vested during fiscal year 2012. The majority of RSUs that vested in 2014 and 2013 were net settled such that the Company withheld a portion of the shares at fair value to satisfy tax withholding requirements. In fiscal year s 201 4 and 2013, the vesting of RSU’s reduced the authorized and unissued share b alance by approximately 0.6 million and 0.2 mill ion, respectively. Total shares withheld and subsequently retired out of the Plan were approximately 0.2 million and 0.1 million, and total payments for the employees’ tax obligations to taxing authorities were $3.9 million and $1.7 million for fiscal years 2014 and 2013, respectively. A portion of RSUs that vested in fiscal year 2014 were cash settled such that the Company received cash from employees in lieu of withholding shares to satisfy tax withholding requirements. The total amount received from cash settled shares during fiscal year 2014 was $0.2 million.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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