Stock-based Compensation

6 Months Ended

Sep. 30, 2011

Stock-based Compensation [Abstract]

Stock-based Compensation

Note 8.  Stock-based Compensation

Stock Option and Award Plans:  The Company grants options to purchase shares of its common stock and is authorized to award restricted shares of common stock pursuant to the terms of its 2008 Equity Incentive Plan, its 1993 Stock Option Plan and its 1997 Stock Option Program. Upon stockholder approval of the 2008 Equity Incentive Plan in August 2008, the 1993 Stock Option Plan and the 1997 Stock Option Program were terminated, and all shares available for future grants of awards under the 1993 Stock Option Plan and the 1997 Stock Option Program were terminated.

Stock options generally become exercisable ratably over a four-year period and expire after seven to ten years. Options may be granted to officers, employees, directors and independent contractors to purchase common stock at a price not less than 100% of the fair market value at the date of grant. There were no stock option exercises in the three and six months ended September 30, 2011. Stock option exercises were none and 10,041 shares, respectively, in the comparable periods ended September 24, 2010.

Restricted stock awards (“RSAs”) granted under the equity plans are independent of option grants and are subject to restrictions. RSAs, which have been issued since fiscal 2007, are subject to forfeiture if employment or services are terminated prior to the release of restrictions, which generally occurs on a ratable basis over one to two years from the date of grant. Until the restriction is released, the shares cannot be transferred. These shares have the same cash dividend and voting rights as other common stock and are considered as issued and outstanding. The cost of the awards, determined to be the fair market value of the shares at the date of grant, is expensed ratably over the period the restrictions lapse.

Restricted stock unit awards (“RSUs”) granted under the 2008 Equity Incentive Plan are also independent of option grants and are subject to restrictions. RSUs are subject to forfeiture if employment or services are terminated prior to the release of restrictions, which generally occurs on a ratable basis over periods ranging from one day to two years from the date of grant. Until the restriction is released, the shares cannot be transferred. These shares are not considered as issued and outstanding until the release of restrictions. The cost of the awards, determined to be the fair market value of the shares at the date of grant, is expensed ratably over the period the restrictions lapse.

Upon the release of restriction, a portion of the released shares are repurchased from employees by the Company to satisfy withholding-tax obligations arising from the vesting of restricted stock awards. The Company repurchased 37,457 shares from employees in the three months ended September 30, 2011 for a total price of $113,000.

Stock Compensation Expense: Stock-based compensation expense for the three months ended September 30, 2011 and September 24, 2010, was as follows:

(in thousands)	Three Months Ended				Six Months Ended
	September 30, 2011		September 24, 2010		September 30, 2011		September 24, 2010
Cost of revenue	$	140	$	203	$	265	$	402
Sales and marketing		217		407		444		797
Research and development		299		496		616		1,004
General and administrative		201		361		415		710
	$	857	$	1,467	$	1,740	$	2,913

The fair value of the Company's stock option awards granted to employees was estimated using the following weighted-average assumptions:

	Three Months Ended						Six Months Ended
	September 30, 2011			September 24, 2010			September 30, 2011			September 24, 2010
Expected term, in years		4.97			4.94			4.97			4.94
Expected volatility		77.85	%		74.88	%		77.43	%		73.24	%
Risk-free interest rate		0.96	%		1.37	%		1.10	%		1.79	%
Expected dividends		-			-			-			-
Weighted-average fair value	$	1.59		$	1.96		$	1.66		$	2.74