SHARE-BASED COMPENSATION

3 Months Ended

Jun. 30, 2012

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

Note 5.   SHARE-BASED COMPENSATION

The provisions of ASC 718-10-55 requires the measurement and recognition of compensation expense for all share-based payment awards made to our employees and directors, including employee stock options, based on estimated fair values. The following table summarizes stock-based compensation expense related to employee stock options and employee stock purchases for the three months ended June 30, 2012 and 2011, which was allocated as follows:

	Three Months Ended
	June 30, 2012		June 30, 2011
Cost of sales	$	685	$	810
Sales and marketing	210		2,771
General and administrative	11,063		16,581
Research and development	2,703		2,921
Stock-based compensation expense	$	14,661	$	23,083

The Black-Scholes model requires the use of actual employee exercise behavior data and the application of a number of assumptions, including expected volatility, risk-free interest rate and expected dividends. There were 20,000 stock options granted during the three months ended June 30, 2012.

As of June 30, 2012, $290,000 of total unrecognized compensation costs related to nonvested stock options is expected to be recognized over a period of five years.