Note 3 — Net Income per Share

The computations of basic and diluted net income per share for the Company were as follows (in thousands except per share amounts):


	Year ended March 31,
	2011		2010		2009
Net income — basic and diluted	$	128,460	$	64,957	$	107,032

Weighted average shares — basic		176,928		177,279		178,811
Effect of dilutive stock options		1,862		2,061		4,100

Weighted average shares — diluted		178,790		179,340		182,911

Net income per share — basic	$	0.73	$	0.37	$	0.60

Net income per share — diluted	$	0.72	$	0.36	$	0.59

Employee equity share options, non-vested shares and similar share-based compensation awards granted by the Company are treated as potential shares in computing diluted net income per share. Diluted shares outstanding include the dilutive effect of in-the-money share-based awards which is calculated based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock method, the amount that the employee must pay for exercising share-based awards, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of tax impact that would be recorded in additional paid-in capital when the award becomes deductible are assumed to be used to repurchase shares.

During fiscal years 2011, 2010 and 2009, 13,705,406, 15,186,997 and 10,567,217 share equivalents attributable to outstanding stock options and RSUs were excluded from the calculation of diluted net income per share because the combined exercise price, average unamortized fair value and assumed tax benefits upon exercise of these options and RSUs were greater than the average market price of the Company's shares, and therefore their inclusion would have been anti-dilutive.

The following table illustrates the dilution effect of share-based awards granted, assumed and exercised (in thousands):


	Year ended March 31
	2011			2010			2009
Basic weighted average shares outstanding as of March 31		176,928			177,279			178,811
Stock options and RSUs granted		2,431			3,902			4,239
Stock options and restricted stock assumed in LifeSize acquisition		—			1,078			—
Stock options and RSUs canceled, forfeited, or expired		(1,411	)		(1,440	)		(1,163	)

Net awards granted and assumed		1,020			3,540			3,076

Grant dilution⁽¹⁾		0.6	%		2.0	%		1.7	%
Stock options exercised and RSUs vested		2,889			1,980			2,037
Exercise dilution ⁽²⁾		1.6	%		1.1	%		1.1	%

(1)	The percentage of grant dilution is computed based on net awards granted and assumed as a percentage of basic weighted average shares outstanding.

(2)	The percentage of exercise dilution is computed based on options exercised as a percentage of basic weighted average shares outstanding.