Common Stock and Stock Plans

12 Months Ended

Mar. 30, 2012

Common Stock and Stock Plans [Abstract]

Common Stock and Stock Plans

Note 6 — Common Stock and Stock Plans

In March 2010, the Company filed a universal shelf registration statement with the SEC for the future sale of an unlimited amount of debt securities, common stock, preferred stock, depositary shares, warrants, and rights. The securities may be offered from time to time, separately or together, directly by the Company, by selling security holders, or through underwriters, dealers or agents at amounts, prices, interest rates and other terms to be determined at the time of the offering.

On March 31, 2010, the Company and certain former WildBlue equity and debt holders (the WildBlue Investors) completed the sale of an aggregate of 6,900,000 shares of ViaSat common stock in an underwritten public offering, 3,173,962 of which were sold by the Company and 3,726,038 of which were sold by such WildBlue Investors. The Company’s net proceeds from the offering were approximately $100.5 million after deducting underwriting discounts and estimated offering expenses. The shares sold by such WildBlue Investors in the offering constituted shares of ViaSat common stock issued to such WildBlue Investors in connection with the Company’s acquisition of WildBlue. On April 1, 2010, the Company used $80.0 million of the net proceeds to repay borrowings outstanding at that time under the Credit Facility. The remaining net proceeds from the offering were used for general corporate purposes.

In November 1996, the Company adopted the 1996 Equity Participation Plan (the Equity Participation Plan). The Equity Participation Plan provides for the grant to executive officers, other key employees, consultants and non-employee directors of the Company a broad variety of stock-based compensation alternatives such as nonqualified stock options, incentive stock options, restricted stock units and performance awards. From November 1996 to September 2010 through various amendments of the Equity Participation Plan, the Company increased the maximum number of shares reserved for issuance under this plan from 2,500,000 shares to 17,400,000 shares. The Company believes that such awards better align the interests of its employees with those of its stockholders. Shares of the Company’s common stock granted under the Equity Participation Plan in the form of stock options or stock appreciation right are counted against the Equity Participation Plan share reserve on a one for one basis. Shares of the Company’s common stock granted under the Equity Participation Plan as an award other than as an option or as a stock appreciation right with a per share purchase price lower than 100% of fair market value on the date of grant are counted against the Equity Participation Plan share reserve as two shares for each share of common stock up to September 22, 2010 and subsequently as 2.65 shares for each share of common stock. Restricted stock units are granted to eligible employees and directors and represent rights to receive shares of common stock at a future date. As of March 30, 2012, the Company had granted options and restricted stock units, net of cancellations, to purchase 9,320,033 and 3,053,239 shares of common stock, respectively, under the Equity Participation Plan.

In November 1996, the Company adopted the ViaSat, Inc. Employee Stock Purchase Plan (the Employee Stock Purchase Plan) to assist employees in acquiring a stock ownership interest in the Company and to encourage them to remain in the employment of the Company. The Employee Stock Purchase Plan is intended to qualify under Section 423 of the Internal Revenue Code. In July of 2009, the Company amended the Employee Stock Purchase Plan to increase the maximum number of shares reserved for issuance under this plan from 1,500,000 shares to 2,250,000 shares. The Employee Stock Purchase Plan permits eligible employees to purchase common stock at a discount through payroll deductions during specified six-month offering periods. No employee may purchase more than $25,000 worth of stock in any calendar year. The price of shares purchased under the Employee Stock Purchase Plan is equal to 85% of the fair market value of the common stock on the first or last day of the offering period, whichever is lower. As of March 30, 2012, the Company had issued 1,837,156 shares of common stock under the Employee Stock Purchase Plan.

Total stock-based compensation expense recognized in accordance with the authoritative guidance for share-based payments was as follows:

	Fiscal Years Ended
	March 30, 2012			April 1, 2011			April 2, 2010
	(In thousands)
Stock-based compensation expense before taxes	$	21,382		$	17,440		$	12,212
Related income tax benefits		(8,010	)		(6,511	)		(4,429	)
Stock-based compensation expense, net of taxes	$	13,372		$	10,929		$	7,783

For fiscal year 2012, the Company recorded no incremental tax benefits from stock options exercised and restricted stock unit award vesting as the excess tax benefit from stock options exercised and restricted stock unit award vesting increased the Company’s net operating loss carryforward. For fiscal year 2011, the Company recorded an incremental tax benefit from stock options exercised and restricted stock unit awards vesting of $0.9 million which was classified as part of cash flows from financing activities in the consolidated statements of cash flows. For fiscal year 2010, the Company recorded no incremental tax benefits from stock options exercised and restricted stock unit award vesting as the excess tax benefit from stock options exercised and restricted stock unit award vesting increased the Company’s net operating loss carryforward.

The Company has no awards with market or performance conditions. The compensation cost that has been charged against income for the Equity Participation Plan under the authoritative guidance for share-based payments was $20.0 million, $16.2 million and $10.9 million, and for the Employee Stock Purchase Plan was $1.4 million, $1.2 million and $1.3 million, for the fiscal years ended March 30, 2012, April 1, 2011 and April 2, 2010, respectively. The Company capitalized $1.6 million of stock-based compensation expense as a part of the cost for software development for resale included in other assets and as a part of the machinery and equipment for the internal use included in property, equipment and satellites for the fiscal year 2012. There was no material compensation cost capitalized for fiscal years 2011 and 2010.

As of March 30, 2012, total unrecognized compensation cost related to unvested stock-based compensation arrangements granted under the Equity Participation Plan (including stock options and restricted stock units) and the Employee Stock Purchase Plan was $61.4 million and $0.5 million, respectively. These costs are expected to be recognized over a weighted average period of 2.6 years, for each stock options and restricted stock units under the Equity Participation Plan and less than six months for the Employee Stock Purchase Plan.

Stock options and employee stock purchase plan. The Company’s employee stock options typically have a simple four-year vesting schedule and a six to ten year contractual term. The weighted average estimated fair value of employee stock options granted and employee stock purchase plan shares issued during fiscal year 2012 was $17.36 and $11.74 per share, respectively, during fiscal year 2011 was $14.24 and $8.55 per share, respectively, and during fiscal year 2010 was $10.55 and $7.84 per share, respectively, using the Black-Scholes model with the following weighted average assumptions (annualized percentages):

	Employee Stock Options									Employee Stock Purchase Plan
	Fiscal Year 2012			Fiscal Year 2011			Fiscal Year 2010			Fiscal Year 2012			Fiscal Year 2011			Fiscal Year 2010
Volatility		41.4	%		42.2	%		43.0	%		38.4	%		28.3	%		43.7	%
Risk-free interest rate		0.9	%		0.9	%		1.6	%		0.1	%		0.2	%		0.3	%
Dividend yield		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
Expected life		5.5 years			4.2 years			4.2 years			0.5 years			0.5 years			0.5 years

The Company’s expected volatility is a measure of the amount by which its stock price is expected to fluctuate over the expected term of the stock-based award. The estimated volatilities for stock options are based on the historical volatility calculated using the daily stock price of the Company’s stock over a recent historical period equal to the expected term. The risk-free interest rate that the Company uses in determining the fair value of its stock-based awards is based on the implied yield on U.S. Treasury zero-coupon issues with remaining terms equivalent to the expected term of its stock-based awards. The expected term or life of employee stock options represents the expected period of time from the date of grant to the estimated date that the stock options under the Company’s Equity Participation Plan would be fully exercised. The expected term assumption is estimated based primarily on the options’ vesting terms and remaining contractual life and employees’ expected exercise and post-vesting employment termination behavior. Prior to fiscal year 2012, the expected life of employee stock options was calculated using the simplified method consistent with the authoritative guidance for share-based payments, due to significant changes in the Company’s option terms in October of 2006 and due to stock options meeting “plain-vanilla” requirements.

A summary of employee stock option activity for fiscal year 2012 is presented below:

	Number of Shares			Weighted Average Exercise Price per Share		Weighted  Average Remaining Contractual Term in Years		Aggregate  Intrinsic Value (In thousands)
Outstanding at April 1, 2011		3,839,468		$	22.66
Options granted		368,000			44.73
Options canceled		(10,200	)		32.11
Options exercised		(795,634	)		18.45
Outstanding at March 30, 2012		3,401,634		$	26.00		2.62	$	75,556
Vested and exercisable at March 30, 2012		2,631,472		$	22.27		2.01	$	68,273

The total intrinsic value of stock options exercised during fiscal years 2012, 2011 and 2010 was $20.8 million, $21.3 million and $11.3 million, respectively.

Transactions related to the Company’s stock options are summarized as follows:

	Number of Shares			Weighted Average Exercise Price per Share
Outstanding at April 3, 2009		5,449,049		$	20.12
Options granted		383,900			29.05
Options canceled		(94,874	)		29.06
Options exercised		(1,019,899	)		19.06
Outstanding at April 2, 2010		4,718,176			20.90
Options granted		266,250			41.26
Options canceled		(20,543	)		27.40
Options exercised		(1,124,415	)		19.60
Outstanding at April 1, 2011		3,839,468			22.66
Options granted		368,000			44.73
Options canceled		(10,200	)		32.11
Options exercised		(795,634	)		18.45
Outstanding at March 30, 2012		3,401,634		$	26.00

All options issued under the Company’s stock option plans have an exercise price equal to the fair market value of the Company’s stock on the date of the grant.

Restricted stock units. Restricted stock units represent a right to receive shares of common stock at a future date determined in accordance with the participant’s award agreement. There is no exercise price and no monetary payment required for receipt of restricted stock units or the shares issued in settlement of the award. Instead, consideration is furnished in the form of the participant’s services to the Company. Restricted stock units generally vest over four years. Compensation cost for these awards is based on the fair value on the date of grant and recognized as compensation expense on a straight-line basis over the requisite service period. For fiscal years 2012, 2011 and 2010, the Company recognized $16.7 million, $12.6 million and $7.4 million, respectively, in stock-based compensation expense related to these restricted stock unit awards.

The per unit weighted average grant date fair value of restricted stock units granted during fiscal years 2012, 2011 and 2010 was $44.28, $41.48 and $29.19, respectively. A summary of restricted stock unit activity for fiscal year 2012 is presented below:

	Number of Restricted Stock Units			Weighted Average Grant Date Fair Value per Share
Outstanding at April 1, 2011		1,549,463		$	32.41
Awarded		684,692			44.28
Forfeited		(36,474	)		33.07
Released		(472,311	)		44.11
Outstanding at March 30, 2012		1,725,370		$	37.57
Vested and deferred at March 30, 2012		69,601		$	26.71

The total fair value of shares vested related to restricted stock units during the fiscal years 2012, 2011 and 2010 was $15.1 million, $11.3 million and $5.5 million, respectively.

Transactions related to the Company’s restricted stock units are summarized as follows:

	Number of Restricted Stock Units
Outstanding at April 3, 2009		814,211
Awarded		831,250
Forfeited		(21,807	)
Released		(234,039	)
Outstanding at April 2, 2010		1,389,615
Awarded		630,056
Forfeited		(37,035	)
Released		(433,173	)
Outstanding at April 1, 2011		1,549,463
Awarded		684,692
Forfeited		(36,474	)
Released		(472,311	)
Outstanding at March 30, 2012		1,725,370