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Equity Compensation | 12 Months Ended
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Mar. 28, 2015
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 optio ns, restricted stock awards, phantom stock awards (also called restricted stock units), and performance awards (also called market stock units) under the Plan. Each stock option granted reduces the total shares available for grant under the Plan by one share. Each full value award granted (including restricted stock awards, restricted stock units and market stock units) reduces the total shares available for grant under the Plan by 1.5 shares. 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. Market stock units are subject to a vesting schedule of three years. T he following table summarizes the activity in total shares available for grant (in thousands):
|  | Shares
|  | Available for
|  | Grant
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
Plans terminated |  | -
Shares added |  | 3,300
Granted |  | (3,181)
Forfeited |  | 230
Balance, March 28, 2015 |  | 3,896
As of March 28, 2015, approximately 12.6 million shares of common stock were reserved for issuance under the Plan. 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 shares granted under the P lan (in thousands, except per share amounts):
| Fiscal Year
|  | 2015 |  |  | 2014 |  |  | 2013
Cost of sales | $ | 747 |  | $ | 864 |  | $ | 751
Research and development |  | 11,222 |  |  | 10,392 |  |  | 10,549
Sales, general and administrative |  | 25,580 |  |  | 11,818 |  |  | 10,195
Effect on pre-tax income |  | 37,549 |  |  | 23,074 |  |  | 21,495
Income Tax Benefit |  | (37,692) |  |  | (8,445) |  |  | (106)
Total share-based compensation expense (benefit) (net of taxes) |  | (143) |  |  | 14,629 |  |  | 21,389
Share-based compensation effects on basic earnings per share | $ | 1.20 |  | $ | 0.50 |  | $ | 0.33
Share-based compensation effects on diluted earnings per share |  | 1.15 |  |  | 0.48 |  |  | 0.32
Share-based compensation effects on operating activities cash flow |  | (143) |  |  | 14,629 |  |  | 21,389
Share-based compensation effects on financing activities cash flow |  | 37,692 |  |  | 8,445 |  |  | 106
T he total share based compensation expense included in the table above and which is attribut able to restricted stock awards, restricted stock units and market stock units was $34.0 million, $18.6 million, $16.3 million, for fiscal years 2015, 2014, and 2013, respectively. As of March 28, 201 5, there was $40.7 million of compensation costs related to non-vested stock options, re stricted stock units, and market 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 1.27 years for stock options, 1.50 years for restricted stock units, and 2.51 years for market stock units. Stock Option s W e estimated the fair value of each stock option grant ed 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 28, 2015 |  |  | March 29, 2014 |  |  | March 30, 2013 |
Expected stock price volatility |  | 38.79 | - | 42.12 | % |  | 51.93 | - | 54.34 | % |  | 63.42 | %
Risk-free interest rate |  | 0.49 | - | 0.91 | % |  | 0.47 | - | 0.52 | % |  | 0.31 | %
Expected term (in years) |  | 2.15 | - | 2.87 |  |  | 2.46 | - | 2.61 |  |  | 2.46 |
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 2015, 2014, and 2013, were $7.26, $10.45, and $20.43, respectively. D uring fiscal year s 2015, 2014, and 2013, we received a net $5.2 million, $5.1 million, $12.0 million, respectively, from the exercise of 0.7 million, 0.8 million, and 1.7 million, respectively, stock options granted under the Company’s S tock Plan. T he total intrinsic value of stock options exercised during fiscal year 2015, 2014, and 2013, was $12.8 million, $12.4 million, and $48.6 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 dditional information with respect to stock option activity is as follows (in thousand s, except per share amounts):
|  | Outstanding Options
|  |  |  |  | Weighted
|  |  |  |  | Average
|  | Number |  |  | Exercise Price
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
Options granted |  | 310 |  |  | 21.69
Options exercised |  | (696) |  |  | 7.47
Options forfeited |  | (5) |  |  | 19.94
Options expired |  | (1) |  |  | 4.65
Balance, March 28, 2015 |  | 3,333 |  | $ | 14.31
A dditional information with regards to outstanding options that are vesting, expected to vest, or exercisable as of March 28, 201 5 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 |  | 3,311 |  | $ | 14.25 |  | 5.43 |  | $ | 64,449
Exercisable |  | 2,670 |  | $ | 11.83 |  | 4.66 |  | $ | 58,150
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 $4.4 million, $4.8 million, and $4.8 million, became vested during fiscal years 2015, 2014, and 2013, respectively. T he following table summarizes information regarding outstanding and exercisable options as of March 28, 201 5 (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 |  | 306 |  | 3.67 |  | $ | 5.19 |  | 306 |  | $ | 5.19
$5.55 - $5.55 |  | 688 |  | 4.53 |  |  | 5.55 |  | 688 |  |  | 5.55
$5.66 - $7.87 |  | 568 |  | 2.26 |  |  | 7.39 |  | 568 |  |  | 7.39
$8.06 - $16.25 |  | 764 |  | 5.79 |  |  | 15.29 |  | 710 |  |  | 15.28
$16.28 - $23.34 |  | 656 |  | 8.29 |  |  | 21.48 |  | 218 |  |  | 20.90
$23.80 - $38.99 |  | 351 |  | 7.89 |  |  | 35.11 |  | 180 |  |  | 36.49
|  | 3,333 |  | 5.45 |  | $ | 14.31 |  | 2,670 |  | $ | 11.83
As of March 28, 2015 and March 29, 2014, the number of options exercisa ble was 2.7 million and 3.0 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. A summary of the activity for RSA’s in fiscal year s 2015, 2014, and 2013, is presented below (in thousands, except per share amounts):
|  |  |  | Weighted
|  |  |  | Average
|  |  |  | Grant Date
| Number of |  |  | Fair Value
| Shares |  |  | (per share)
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
Granted | - |  |  | -
Vested | (5) |  |  | 17.28
Forfeited | - |  |  | -
March 28, 2015 | - |  | $ | -
There were no RSA’s outstanding as of March 28, 2015. RSA’s with a fair value of $86 thousand and $951 thousand became vested during fiscal years 2015 and 2013, 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. A summary of the activity for RSU’s in fiscal year 2015, 2014, and 2013 is presented below (in thousands, except year and per share amounts):
|  |  |  | Weighted
|  |  |  | Average
| Shares |  |  | Fair Value
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
Granted | 1,887 |  |  | 22.04
Vested | (1,224) |  |  | 19.52
Forfeited | (151) |  |  | 26.17
March 28, 2015 | 2,821 |  | $ | 25.57
The aggregate intrinsic value of RSU’s outstanding as of March 28, 2015 was $93.9 million. Additional information with regards to outstanding restricted stock units that are expected to vest as of March 28, 201 5, is as follows (in thousands, except year and per share amounts):
|  |  |  |  | Weighted |  | Weighted Average
|  |  |  |  | Average |  | Remaining Contractual
|  | Shares |  |  | Fair Value |  | Term (years)
Expected to vest |  | 2,646 |  | $ | 25.57 |  | 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 $23.9 million and $11.1 million became vested during fiscal year s 2015 and 2014, respectively. The majority of RSUs that vested in 2015 and 2014 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 2015 and 201 4, the vesting of RSU’s reduced the authorized and unissued share b alance by approximately 1.2 million and 0.6 million, respectively. Total shares withheld and subsequently retired out of the Plan were approximately 0.2 million and 0.2 million, and total payments for the employees’ tax obligations to taxing authorities were $4.6 million and $3.9 million for fiscal years 2015 and 2014, respectively. A portion of RSUs that vested in fiscal year 2015 and 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 2015 and 2014 was $0.1 million and $0.2 million, respectively. Market Stock Units In fiscal year 2015, the Company began granting market stock units (“MSU’s”) to select employees. MSU’s vest based upon the relative total shareholder return (“TSR”) of the Company as compared to that of the Index. The requisite service period for these MSU’s is also the vesting period, which is three years. The fair value of each MSU granted was determined on the date of grant using the Monte Carlo simulation, which calculates the present value of the potential outcomes of future stock prices of the Company and the Index over the requisite service period. The projection of the stock prices are based on the risk-free rate of return, the volatilities of the stock price of the Company and the Index, the correlation of the stock price of the Company with the Index, and the dividend yield. The fair values estimated from the Monte Carlo simulation were calculated using a dividend yield of zero and the following additional assumptions:
|  | Year Ended |
|  | March 28, |
|  | 2015 |
Expected stock price volatility |  | 39.65 | %
Risk-free interest rate |  | 1.00 | %
Expected term (in years) |  | 3.00 |
Using the Monte Carlo simulation, the weighted average estimated fair value of the MSU’s granted i n fiscal year 2015 was $22.00. A summary of the activity for MSU’s in fiscal year 2015 is presented below (in thousands, except year and per share amounts):
|  |  |  | Weighted
|  |  |  | Average
| Shares |  |  | Fair Value
March 29, 2014 | - |  | $ | -
Granted | 35 |  |  | 22.00
Vested | - |  |  | -
Forfeited | - |  |  | -
March 28, 2015 | 35 |  | $ | 22.00
The aggregate intrinsic value of MSU’s outstanding as of March 28, 2015 was $1.2 million. Additional information with regard to outstanding MSU’s that are expected to vest as of March 28, 2015 is as follows (in thousands, except year and per share amounts):
|  |  |  |  | Weighted |  | Weighted Average
|  |  |  |  | Average |  | Remaining Contractual
|  | Shares |  |  | Fair Value |  | Term (years)
Expected to vest |  | 35 |  | $ | 22.00 |  | 2.51
No MSU’s became vested in 2015.

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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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