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Share-Based Compensation (Tables)
9 Months Ended
Oct. 02, 2011
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] 
Fair value of stock options granted to employees, officers and non-employee board members and ESPP shares granted to employees
The fair value of the Company’s stock options granted to employees, officers and non-employee board members and ESPP shares issued to employees, excluding unvested stock options assumed through the acquisition of Pliant, for the three and nine months ended October 2, 2011 and October 3, 2010 was estimated using the following weighted average assumptions.
 
Three months ended
 
Nine months ended
 
October 2,
2011
 
October 3,
2010
 
October 2,
2011
 
October 3,
2010
Option Plan Shares
 
 
 
 
 
 
 
Dividend yield
None
 
None
 
None
 
None
Expected volatility
0.42
 
0.54
 
0.42
 
0.51
Risk free interest rate
0.80%
 
1.18%
 
1.52%
 
1.56%
Expected lives
4.3 years
 
4.3 years
 
4.2 years
 
3.8 years
Estimated annual forfeiture rate
8.57%
 
7.32%
 
8.57%
 
7.32%
Weighted average fair value at grant date
$13.99
 
$17.41
 
$17.72
 
$12.30
 
 
 
 
 
 
 
 
Employee Stock Purchase Plan Shares
 
 
 
 
 
 
 
Dividend yield
None
 
None
 
None
 
None
Expected volatility
0.44
 
0.50
 
0.43
 
0.56
Risk free interest rate
0.08%
 
0.19%
 
0.13%
 
0.18%
Expected lives
½ year
 
½ year
 
½ year
 
½ year
Weighted average fair value at purchase date
$10.44
 
$12.34
 
$12.30
 
$9.95
Stock options and stock appreciation rights
A summary of stock option and stock appreciation rights (“SARs”) activity under all of the Company’s share-based compensation plans as of October 2, 2011 and changes during the nine months ended October 2, 2011, is presented below.
 
Shares
 
Weighted Average Exercise Price
 
Weighted Average Remaining Contractual Term (Years)
 
Aggregate Intrinsic Value
 
(In thousands, except exercise price and contractual term)
Options and SARs outstanding at January 2, 2011
20,393

 
$
32.18

 
3.8
 
$
393,996

Granted
2,935

 
44.65

 
 
 


Exercised
(2,953
)
 
23.09

 
 
 
71,092

Forfeited
(344
)
 
26.72

 
 
 
 

Expired
(320
)
 
51.09

 
 
 
 

Options assumed through acquisition
209

 
4.35

 
 
 
 

Options and SARs outstanding at October 2, 2011
19,920

 
35.28

 
3.6
 
199,996

Options and SARs vested and expected to vest after October 2, 2011, net of forfeitures
19,207

 
35.24

 
3.7
 
194,333

Options and SARs exercisable at October 2, 2011
13,229

 
36.64

 
2.7
 
125,628

Summary of the changes in RSUs outstanding
A summary of the changes in RSUs outstanding under the Company’s share-based compensation plan during the nine months ended October 2, 2011 is presented below.
 
Shares
 
Weighted Average Grant Date Fair Value
 
Aggregate Intrinsic Value
 
(In thousands, except for weighted average grant date fair value)
Non-vested share units at January 2, 2011
1,244

 
$
28.64

 
$
62,007

Granted
1,317

 
47.52

 
 

Vested
(372
)
 
29.24

 
18,128

Forfeited
(79
)
 
35.21

 
 

Non-vested share units at October 2, 2011
2,110

 
40.08

 
85,166

Share-based compensation expense
The following tables set forth the detailed allocation of the share-based compensation expense for the three and nine months ended October 2, 2011 and October 3, 2010.
 
Three months ended
 
Nine months ended
 
October 2,
2011
 
October 3,
2010
 
October 2,
2011
 
October 3,
2010
 
(In thousands)
Share-based compensation expense by caption:
 
 
 
 
 
 
 
Cost of product revenues
$
1,283

 
$
1,205

 
$
3,316

 
$
4,972

Research and development
8,345

 
6,629

 
23,273

 
19,975

Sales and marketing
2,704

 
2,959

 
7,746

 
8,299

General and administrative
3,397

 
10,151

 
10,343

 
19,545

Total share-based compensation expense
15,729

 
20,944

 
44,678

 
52,791

Total tax benefit recognized
(3,977
)
 
(6,360
)
 
(11,709
)
 
(15,108
)
Decrease in net income
$
11,752

 
$
14,584

 
$
32,969

 
$
37,683

 
 
 
 
 
 
 
 
Share-based compensation expense by type of award:
 

 
 

 
 

 
 

Stock options and SARs
$
8,224

 
$
15,650

 
$
23,873

 
$
36,411

RSUs
6,201

 
3,339

 
15,311

 
11,047

ESPP
1,304

 
1,955

 
5,494

 
5,333

Total share-based compensation expense
15,729

 
20,944

 
44,678

 
52,791

Total tax benefit recognized
(3,977
)
 
(6,360
)
 
(11,709
)
 
(15,108
)
Decrease in net income
$
11,752

 
$
14,584

 
$
32,969

 
$
37,683

Fair value of options and RSUs
The total grant date fair value of options and RSUs vested during the three and nine months ended October 2, 2011 and October 3, 2010 was as follows:
 
Three months ended
 
Nine months ended
 
October 2,
2011
 
October 3,
2010
 
October 2,
2011
 
October 3,
2010
 
(In thousands)
Fair value of options vested
$
7,153

 
$
8,016

 
$
26,554

 
$
33,048

Fair value of RSUs vested
7,783

 
12,806

 
18,128

 
21,750

Total fair value of options and RSUs vested
$
14,936

 
$
20,822

 
$
44,682

 
$
54,798