Share-Based Compensation (Notes)

9 Months Ended

Mar. 29, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

SHARE-BASED COMPENSATION

During the three and nine months ended March 29, 2013 and March 30, 2012, the Company granted stock options and restricted stock units to employees and non-employee directors under its 2005 Equity Incentive Plan and issued shares of the Company's common stock to participating employees under its 2005 Employee Stock Purchase Plan. Total share-based compensation expense was as follows (in thousands):

	Three Months Ended				Nine Months Ended
	March 29, 2013		March 30, 2012		March 29, 2013		March 30, 2012
Cost of revenue	$	391	$	368	$	1,262	$	1,035
Research and development	619		526		1,746		1,548
Sales and marketing	473		458		1,282		1,258
General and administrative	1,326		2,264		3,526		4,084
Total share-based compensation expense	$	2,809	$	3,616	$	7,816	$	7,925

Determining Fair Value

The fair value of share-based awards was estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions for the following periods:

	Three Months Ended						Nine Months Ended
	March 29, 2013			March 30, 2012			March 29, 2013			March 30, 2012
Option Plans Shares
Risk-free interest rate	0.8		%	0.8		%	0.7		%	1		%
Volatility	65.1		%	63.8		%	66.1		%	70.0		%
Weighted average expected life (in years)	5.00			4.76			5.00			4.73
Expected dividend yield	—			—			—			—
Weighted average fair value	$	5.66		$	5.36		$	4.83		$	7.17
ESPP Plan shares
Risk-free interest rate	0.2		%	0.2		%	0.2		%	0.2		%
Volatility	82.6		%	76.1		%	83.0		%	78.4		%
Weighted average expected life (in years)	1.25			1.25			1.25			1.25
Expected dividend yield	—			—			—			—
Weighted average fair value	$	5.77		$	4.37		$	4.75		$	5.38

Stock Option Activity

A summary of stock option activity for the nine months ended March 29, 2013 was as follows:

	Options Outstanding
	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual term in years	Aggregate Intrinsic Value
						(in thousands)
Balance at June 29, 2012	3,703,660		$	10.79
Options granted	154,000		8.87
Options exercised	(1,215,356	)	10.74
Options cancelled	(215,661	)	12.40
Balance at March 29, 2013	2,426,643		$	10.55	6.96	$	9,503
Vested and expected to vest at March 29, 2013	2,271,522		$	10.57	6.85	$	8,818
Exercisable at March 29, 2013	1,472,902		$	10.91	5.92	$	5,827

The total intrinsic value of options exercised in the nine months ended March 29, 2013 and March 30, 2012 was $3.9 million and $1.0 million, respectively. The total fair value of shares vested during the nine months ended March 29, 2013 and March 30, 2012 was $3.2 million and $2.2 million, respectively.

As of March 29, 2013, there was $2.1 million of total unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a weighted average period of 1.14 years.

Restricted Stock Unit Activity

The following table summarizes the Company's activity with respect to restricted stock units (“RSUs”) for the nine months ended March 29, 2013:

	Number of Shares
Balance at June 29, 2012	918,764
Awarded	950,139
Released	(295,118	)
Forfeited	(117,250	)
Balance at March 29, 2013	1,456,535
Vested and expected to vest at March 29, 2013	1,128,162

In August 2012, the Company granted time-based RSUs ("executive time-based RSUs") and performance-based RSUs (“executive PSUs”) to members of the Company's executive management team.  The executive time-based RSUs vest over four years, with 25% vesting after one year and an additional 6.25% vesting quarterly thereafter, subject to the recipient's continuous service through each vesting date. The executive PSUs are eligible to vest upon the achievement of certain financial performance criteria for the Company for fiscal 2013.  If the performance criteria are not met, none of the executive PSUs will vest and will be forfeited.  If the performance criteria are met, 25% of the executive PSUs would vest following the Company's public announcement of financial results for fiscal 2013 and the remaining 75% of the executive PSUs would vest in three annual installments thereafter, subject to the recipient's continued service through each vesting date.  For purposes of reporting and determining the share-based compensation expense, the company estimated that 298,000 PSUs will be awarded as of March 29, 2013.  The Company assesses the achievement of these performance metrics on a quarterly basis. 

As of March 29, 2013, there was $8.7 million of total unrecognized compensation cost related to RSUs, which is expected to be recognized over a weighted average period of 2.74 years.

RSUs are converted into common stock upon vesting. Upon the vesting of RSUs, the Company generally withholds a portion of the shares to cover applicable taxes and decreases the shares issued to the employee by a corresponding value. The withholding tax obligations are based upon the fair market value of the Company’s common stock on the vesting date. The number and the value of the shares withheld for tax purposes are summarized in the table below (in thousands except share amounts):

	Three Months Ended				Nine Months Ended
	March 29, 2013		March 30, 2012		March 29, 2013		March 30, 2012
RSUs shares withheld for taxes	66,254		22,673		113,399		79,730
RSUs amounts withheld for taxes	$	995	$	222	$	1,371	$	1,040

Employee Stock Purchase Plan

At March 29, 2013, the total unrecognized compensation cost related to rights to purchase the Company's common stock under the employee stock purchase plan ("ESPP") was approximately $1.5 million. This cost will be amortized on a straight-line basis over approximately 1.9 years. The following table shows the shares issued and their respective weighted-average purchase price per share, pursuant to the ESPP, during the three and nine months ended March 29, 2013 and March 30, 2012. Beginning in February 2013, the Company offered this benefit to employees in various international locations. Prior to that, the ESPP was offered primarily to employees located in the U.S.

	Three Months Ended				Nine Months Ended
	March 29, 2013		March 30, 2012		March 29, 2013		March 30, 2012
Shares issued	256,972		248,785		485,707		508,132
Weighted-average purchase price per share	$	6.76	$	6.87	$	7.09	$	6.42