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Stock-Based Compensation
 3 Months Ended
Jun. 30, 2013
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stock-Based Compensation
2. Stock-Based Compensation

The Company accounts for its stock-based compensation at fair value. The following table summarizes stock-based compensation expense by financial statement line item for the three months ended June 30, 2013 and 2012 (in thousands):

 

     Three months ended
June 30,		  
     2013      2012  

Cost of revenues

    $ 205       $ 170   

Research and development

      575         562   

Selling, general and administrative

      1,355         1,262   
  

 

 

     

 

 

  

Total

    $ 2,135       $ 1,994   
  

 

 

     

 

 

  

During the three months ended June 30, 2013, the Company granted approximately 314,765 stock options and issued 154,080 shares of common stock in-lieu of cash bonuses to employees under the 2007 Stock Incentive Plan. The shares issued in-lieu of cash bonuses vest immediately, the options granted vest upon the passage of time, generally 3 years. For awards that vest upon the passage of time, expense is being recorded over the vesting period.

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 $3.3 million for the three months ended June 30, 2013. This expense will be recognized over a weighted average expense period of approximately 1.9 years. The total unrecognized compensation cost for unvested outstanding restricted stock was $4.6 million for the three months ended June 30, 2013. This expense will be recognized over a weighted average expense period of approximately 1.3 years.

 

The weighted-average assumptions used in the Black-Scholes valuation model for stock options granted during the three months ended June 30, 2013 and 2012 are as follows:

 

     Three months ended
June 30,		  
     2013     2012  

Expected volatility

      74.6 %      72.0 % 

Risk-free interest rate

      1.7 %      0.9 % 

Expected life (years)

      5.9        5.9   

Dividend yield

      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 United States Treasury rates.