Stock-Based Compensation

9 Months Ended

Oct. 01, 2011

Stock-Based Compensation

Stock-Based Compensation

9. Stock-Based Compensation

In fiscal 2009, the stockholders of the Company approved the 2009 Stock Incentive Plan (the “2009 Plan”) and the 2009 Employee Stock Purchase Plan (the “2009 Purchase Plan”). The 2009 Plan is currently effective, and no further grants will be issued under the Company’s 2000 Stock Incentive Plan (the “2000 Plan”) as of the effective date of the 2009 Plan. The 2009 Plan has a term of 10 years from the shareholders’ approval date. The 2009 Purchase Plan became effective upon the termination of the previous Employee Stock Purchase Plan (the “Purchase Plan”), on April 30, 2010.

Stock-based compensation costs are generally based on the fair values on the date of grant for stock options and on the date of enrollment for the employee stock purchase plans, estimated by using the Black-Scholes option-pricing model. The fair values of stock awards and restricted stock units (RSUs) generally equal their intrinsic value on the date of grant. There were no stock options granted during the nine months ended October 1, 2011 or October 2, 2010. The fair values estimated from the Black-Scholes option-pricing model were calculated using the following assumptions:

	Nine Months Ended
Employee Stock Purchase Plan	October 1, 2011		October 2, 2010
Expected volatility	25.0	%	33.8	%
Risk-free interest rate %	0.3	%	0.6	%
Expected term (in months)	12		15
Dividend yield	—		—

The following are the stock-based compensation costs recognized in the Company’s Condensed Consolidated Statements of Income (in thousands):

	Three Months Ended				Nine Months Ended
	October 1,2011		October 2, 2010		October 1,2011		October 2, 2010
Cost of revenues	$	335	$	368	$	1,015	$	1,075
Research and development	3,581		4,371		11,284		12,921
Selling, general and administrative	5,234		5,591		14,925		17,265
	9,150		10,330		27,224		31,261
Income tax benefit	880		1,321		2,695		4,328
	$	8,270	$	9,009	$	24,529	$	26,933

The Company had approximately $48.7 million of total unrecognized compensation costs related to stock options and stock awards at October 1, 2011 that are expected to be recognized over a weighted-average period of 1.6 years. There were no significant stock-based compensation costs capitalized into assets in any of the periods presented.