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7. STOCK- BASED COMPENSATION | 9 Months Ended
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Dec. 31, 2015
Stock-Based Compensation |
NOTE 7-STOCK- BASED COMPENSATION | NOTE 7—STOCK-BASED COMPENSATION As of December 31, 2015, 6,719,123 shares of common stock were available for grant under the Company’s 2007 Equity Incentive Plan. The following table summarizes the Company’s stock option activities for the nine months ended December 31, 2015:
|  |  |  |  |  | Weighted |  |  |  |  |  |
|  |  |  | Number of Shares |  | Average |  | Weighted |  |  |
|  | Shares |  | Underlying |  | Remaining |  | Average |  |  |
|  | Available for |  | Options |  | Contractual |  | Exercise |  | Intrinsic
|  | Grant |  | Outstanding |  | Life (Years) |  | Price |  | Value
Balance at March 31, 2015 |  | 6,213,943 |  | 6,774,151 |  |  |  | $ | 5.16 |  |  |
Options reserved |  | 1,156,419 |  | — |  |  |  |  | — |  |  |
Granted |  | (661,103) |  | 661,103 |  |  |  |  | 4.90 |  |  |
Exercised |  | — |  | (76,745) |  |  |  |  | 4.19 |  | $ | 46,977
Forfeited/expired |  | 9,864 |  | (19,864) |  |  |  |  | 4.64 |  |  |
Balance at December 31, 2015 |  | 6,719,123 |  | 7,338,645 |  |  |  | $ | 5.15 |  |  |
Options vested and exercisable |  |  |  | 4,976,550 |  | 3.82 |  | $ | 5.05 |  | $ | 484,583
Options vested and expected to vest |  |  |  | 7,290,669 |  | 5.22 |  | $ | 5.14 |  | $ | 484,583
The weighted average fair value per underlying share of options granted during the three months ended December 31, 2015 and 2014 was $1.48 and $1.79, respectively and for the nine months ended December 31, 2015 and 2014 was $1.70 and $2.10, respectively. Options outstanding by exercise price at December 31, 2015 were as follows:
|  |  |  |  | Number of |  | Options Outstanding |  | Options Exercisable
|  |  |  |  | Shares |  | Weighted |  | Weighted Average |  |  |  | Weighted
|  |  |  |  | Underlying |  | Average |  | Remaining |  | Number |  | Average
|  |  |  |  | Options |  | Exercise |  | Contractual |  | Vested and |  | Exercise
Exercise Price |  | Outstanding |  | Price |  | Life (Years) |  | Exercisable |  | Price
$ | 2.43 | - | 3.43 |  | 892,584 |  | $ | 3.18 |  | 3.10 |  | 892,584 |  | $ | 3.18
$ | 3.75 | - | 4.00 |  | 812,779 |  | $ | 3.96 |  | 3.21 |  | 812,779 |  | $ | 3.96
$ | 4.17 | - | 4.68 |  | 747,515 |  | $ | 4.30 |  | 5.94 |  | 357,926 |  | $ | 4.30
$ | 4.81 | - | 4.98 |  | 997,676 |  | $ | 4.92 |  | 7.88 |  | 389,871 |  | $ | 4.88
$ | 5.13 | - | 5.34 |  | 625,513 |  | $ | 5.23 |  | 8.74 |  | 49,980 |  | $ | 5.19
$ | 5.50 |  |  |  | 783,433 |  | $ | 5.50 |  | 0.88 |  | 783,433 |  | $ | 5.50
$ | 5.59 | - | 6.00 |  | 901,930 |  | $ | 5.77 |  | 5.53 |  | 532,248 |  | $ | 5.81
$ | 6.28 | - | 6.63 |  | 812,219 |  | $ | 6.48 |  | 6.36 |  | 645,440 |  | $ | 6.47
$ | 6.82 | - | 7.00 |  | 651,376 |  | $ | 6.90 |  | 6.06 |  | 398,669 |  | $ | 6.92
$ | 9.20 |  |  |  | 113,620 |  | $ | 9.20 |  | 5.07 |  | 113,620 |  | $ | 9.20
|  |  |  |  | 7,338,645 |  | $ | 5.15 |  | 5.25 |  | 4,976,550 |  | $ | 5.05
The following table summarizes stock-based compensation expense by line item in the Condensed Consolidated Statements of Operations, all relating to employee stock plans:
|  | Three Months Ended December 31, |  | Nine Months Ended December 31,
|  | 2015 |  | 2014 |  | 2015 |  | 2014
|  | (In thousands)
Cost of revenues |  | $ | 85 |  | $ | 93 |  | $ | 242 |  | $ | 296
Research and development |  |  | 208 |  |  | 220 |  |  | 649 |  |  | 709
Selling, general and administrative |  |  | 121 |  |  | 77 |  |  | 496 |  |  | 528
Total |  | $ | 414 |  | $ | 390 |  | $ | 1,387 |  | $ | 1,533
As stock-based compensation expense recognized in the Condensed Consolidated Statement of Operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures in accordance with authoritative guidance. The Company estimates forfeitures at the time of grant and revises the original estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates. No tax benefit related to stock-based compensation was recognized in the three months or nine months ended December 31, 2015 or December 31, 2014 due to a full valuation allowance. There were no windfall tax benefits realized from exercised stock options in any of these periods. Compensation cost capitalized within inventory at December 31, 2015 was immaterial. As of December 31, 2015, the Company’s total unrecognized compensation cost was $2.9 million, which will be recognized over a weighted average period of 2.01 years. The Company calculated the fair value of stock-based awards in the periods presented using the Black-Scholes option pricing model and the following weighted average assumptions:
|  | Three Months Ended December 31, |  | Nine Months Ended December 31,
|  | 2015 |  | 2014 |  | 2015 |  | 2014
|  | (In thousands) |  | (In thousands)
Stock Option Plans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk-free interest rate |  |  |  | 1.56 | % |  |  |  | 1.60 | % |  | 1.52 | - | 1.57 | % |  | 1.60 | - | 1.70 | %
Expected life (in years) |  |  |  | 5.00 |  |  |  |  | 5.00 |  |  | 5.00 |  |  |  |  |  |  | 5.00 |
Volatility |  |  |  | 36.3 | % |  |  |  | 41.3 | % |  | 36.3 | - | 38.0 | % |  | 41.3 | - | 44.8 | %
Dividend yield |  |  |  | — | % |  |  |  | — | % |  | — |  | — | % |  |  |  | — | %
Employee Stock Purchase Plan: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk-free interest rate |  |  |  | 0.15 | % |  |  |  | 0.05 | % |  | 0.09 | - | 0.15 | % |  |  |  | 0.05 | %
Expected life (in years) |  |  |  | 0.50 |  |  |  |  | 0.50 |  |  | 0.50 |  |  |  |  |  |  | 0.50 |
Volatility |  |  |  | 27.9 | % |  |  |  | 38.0 | % |  | 26.3 | - | 27.9 | % |  | 30.8 | - | 38.0 | %
Dividend yield |  |  |  | — | % |  |  |  | — | % |  |  |  | — | % |  |  |  | — | %

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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 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 2: 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=51659978&loc=d3e25284-112666 Reference 3: 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 4: 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 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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