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Stockholders' Equity
 12 Months Ended
Mar. 31, 2013
Stockholders' Equity [Abstract]  
Stockholders' Equity

12.    Stockholders’ Equity

Stock-Based Compensation

The components of employee stock-based compensation for the years ended March 31, 2013, 2012 and 2011 were as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

For the Years Ended March 31,

 

 

2013

 

2012

 

2011

Stock options

$
3,389 

$
6,177 

$
6,374 

Restricted stock and stock awards

 
4,698 

 
3,633 

 
6,919 

Employee stock purchase plan

 
51 

 
54 

 
119 

Total stock-based compensation expense

$
8,138 

$
9,864 

$
13,412 

 

The estimated fair value of the Company’s stock-based awards, less expected annual forfeitures, is amortized over the awards’ service period. The total unrecognized compensation cost for unvested outstanding stock options was $3.5 million and $6.1 million for the years ended March 31, 2013 and 2012, respectively. This expense will be recognized over a weighted-average expense period of approximately 1.7 years.  The total unrecognized compensation cost for unvested outstanding restricted stock was $5.8 million and $5.0 million for the years ended March 31, 2013 and 2012, respectively. This expense will be recognized over a weighted-average expense period of approximately 1.3 years.

 

The following table summarizes employee stock-based compensation expense by financial statement line item for the years ended March 31, 2013, 2012 and 2011 (in thousands):

 

 

 

 

 

 

 

 

 

 

 

For the Years Ended March 31,

 

 

2013

 

2012

 

2011

Cost of revenues

$
726 

$
1,121 

$
1,188 

Research and development

 
2,456 

 
2,562 

 
1,977 

Selling, general and administrative

 
4,956 

 
6,181 

 
10,247 

Total

$
8,138 

$
9,864 

$
13,412 

The following table summarizes the information concerning currently outstanding and exercisable employee and non-employee options:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-

 

 

 

 

 

Weighted-

Average

 

 

 

 

 

Average

Remaining

 

Aggregate

 

Options/

 

Exercise

Contractual

 

Intrinsic Value

 

Shares

 

Price

Term

 

(thousands)

Outstanding at March 31, 2012

2,290,416 

$
17.77 

 

 

 

Granted at fair value

857,450 

 
4.09 

 

 

 

Exercised

(480)

 
3.44 

 

 

 

Cancelled/forfeited

(476,192)

 
15.57 

 

 

 

Outstanding at March 31, 2013
2,671,194 

$
13.77 
6.4 

$
0 

Exercisable at March 31, 2013
1,443,185 

$
16.65 
4.6 

$
0 

Fully vested and expected to vest at March 31, 2013
2,577,218 

$
13.88 
6.3 

$
0 

 

The weighted-average grant-date fair value of stock option awards granted during the years ended March 31, 2013, 2012 and 2011 was $2.56 per share, $6.02 per share, and $17.43 per share, respectively. Intrinsic value represents the amount by which the market price of the common stock exceeds the exercise price of the options. Given the decline in the Company’s stock price, exercisable options as of March 31, 2013 had no intrinsic value and at March 31, 2012 had minimal intrinsic value. The aggregate intrinsic value of exercisable options at March 31, 2011 was $8.7 million. Given the decline in the Company’s stock price, the aggregate intrinsic value of options exercised at March 31, 2013 and 2012 was minimal. The aggregate intrinsic value of options exercised at March 31, 2011 was $13.0 million  

The weighted average assumptions used in the Black-Scholes valuation model for stock options granted during the years ended March 31, 2013, 2012, and 2011 are as follows:  

 

 

 

 

 

 

 

 

 

For the Years Ended March 31,

 

 

2013

 

2012

 

2011

 

Expected volatility
72.0 

%
70.0 

%
64.2 

%

Risk-free interest rate
0.9 

%
1.8 

%
2.2 

%

Expected life (years)
5.9 

 
5.9 

 
5.8 

 

Dividend yield

None

 

None

 

None

 

The expected volatility rate was estimated based on an equal weighting of the historical volatility of the Company’s common stock and the implied volatility of the Company’s traded options. The expected term was estimated based on an analysis of the Company’s historical experience of exercise, cancellation, and expiration patterns. The risk-free interest rate is based on the average of the five and seven year U.S. Treasury rates.

The following table summarizes the employee and non-employee restricted stock activity for the year ended March 31, 2013:

 

 

 

 

 

 

 

 

 

 

Weighted

 

Intrinsic

 

 

 

Average

 

Aggregate

 

 

 

Grant Date

 

Value

 

Shares

 

Fair Value

 

(thousands)

Outstanding at April 1, 2012
929,489 

$
10.00 

 

 

Granted

3,126,749 

 
3.48 

 

 

Vested

(1,004,920)

 
7.37 

 

 

Forfeited

(646,493)

 
4.76 

 

 

Outstanding at March 31, 2013
2,404,825 

$
4.58 

$
6,421 

The total fair value of restricted stock that was granted during the years ended March 31, 2013, 2012 and 2011 was $10.6 million, which includes $1.6 million for bonus and severance, $5.6 million, and $10.4 million, respectively. The total fair value of restricted stock that vested during the years ended March 31, 2013, 2012 and 2011 was $3.4 million, which includes $1.6 million for bonus and severance, $4.1 million, and $5.5 million, respectively.

The restricted stock granted during the year ended March 31, 2013 includes approximately 1,422,127 shares of performance-based restricted stock, which would vest upon achievement of certain financial performance measurements.  The restricted stock granted during the year ended March 31, 2012 included approximately 109,211 shares of performance-based restricted stock, which would vest upon achievement of certain financial performance measurements. At March 31, 2011, the Company determined that certain performance measures relating to prior restricted stock grants were not met.  As a result, the Company reversed $1.8 million that had been recorded as stock-based compensation expense related to performance-based awards.  Such shares were cancelled in May 2011. Included in the table above are 37,375 shares of restricted stock units.

 

The remaining shares granted vest upon the passage of time. For awards that vest upon the passage of time, expense is being recorded over the vesting period.

 

Stock-Based Compensation Plans

As of March 31, 2013, the Company had two active stock plans: the 2007 Stock Incentive Plan (the “2007 Plan”) and the 2007 Director Stock Option Plan (the “2007 Director Plan”). The 2007 Plan replaced the Company’s 2004 Stock Incentive Plan upon the approval by the Company’s stockholders on August 3, 2007. The 2007 Director Plan replaced the Second Amended and Restated 1997 Director Stock Option Plan, which expired pursuant to its terms on May 2, 2007.  

The 2007 Plan provides for the grant of incentive stock options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards. In the case of options, the exercise price shall be equal to at least the fair market value of the common stock, as determined by the Board of Directors, on the date of grant. The contractual life of options is generally 10 years. Options generally vest over a 3-5 year period while restricted stock generally vests over a 2-5 year period.

The 2007 Director Plan provides for the grant of nonstatutory stock options and stock awards to members of the Board of Directors who are not also employees of the Company (outside directors). Under the terms of the 2007 Director Plan, each outside director is granted an option to purchase 10,000 shares of common stock upon his or her initial election to the Board with an exercise price equal to the fair market value of our common stock on the date of the grant.  These options vest in equal annual installments over a two-year period.  In addition, each outside director is granted an award of 3,000 shares of common stock three business days following each annual meeting of stockholders, provided that such outside director had served as a director for at least one year.

As of March 31, 2013, the 2007 Plan had 5,389,465 shares and the 2007 Director Plan had 177,000 shares available for future issuance.

Employee Stock Purchase Plan

The Company has an employee stock purchase plan (ESPP) which provides employees with the opportunity to purchase shares of common stock at a price equal to the market value of the common stock at the end of the offering period, less a 15% purchase discount. The Company recognized compensation expense of $0.1 million for each of the years ended March 31, 2013, 2012, and 2011, respectively, related to the ESPP. The Company issued 99,935 shares of common stock related to the ESPP during the year ended March 31, 2013. As of March 31, 2013, the ESPP had 339,269 shares available for future issuance.