Stock-Based Compensation Expense (Tables)

9 Months Ended

Sep. 30, 2012

Stock-Based Compensation Expense Included in Continuing Operations, Net of Estimated Forfeitures

Stock-based compensation expense included in continuing operations, net of estimated forfeitures, related to the Company’s stock options, Employee Stock Purchase Plan (“ESPP”) and restricted stock unit awards by expense category was as follows:

	Three Months Ended				Nine Months Ended
	September 30, 2012		October 2, 2011		September 30, 2012		October 2, 2011
	(In thousands)
Cost of revenues	$	2,573	$	1,460	$	9,088	$	5,324
Research and development		11,170		5,410		35,451		18,286
Selling, general and administrative		13,643		4,883		38,999		15,462
Total stock-based compensation expense	$	27,386	$	11,753	$	83,538	$	39,072

Summary of Changes in Stock Options Outstanding

The following table summarizes changes in stock options outstanding:

	Number of Shares			Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value
	(In thousands)					(In years)		(In thousands)
Options outstanding at December 31, 2011		64,245		$	6.19		0		0
Assumed in SandForce acquisition		7,542		$	0.75		0		0
Granted		5,389		$	8.40		0		0
Exercised		(14,385	)	$	5.32		0		0
Canceled		(4,758	)	$	8.69		0		0
Options outstanding at September 30, 2012		58,033		$	5.70		3.91	$	102,654
Options exercisable at September 30, 2012		35,670		$	6.13		2.71	$	52,025

Summary of Unvested Service-Based Restricted Stock

The following table summarizes changes in service-based RSUs outstanding:

	Number of Units			Weighted-Average Grant Date Fair Value per Share
	(In thousands)
Unvested service-based RSUs outstanding at December 31, 2011		12,085		$	5.94
Assumed in SandForce acquisition		1,576		$	6.17
Granted		7,921		$	8.23
Vested		(3,315	)	$	5.87
Forfeited		(782	)	$	6.53
Unvested service-based RSUs outstanding at September 30, 2012		17,485		$	6.98

Summary of Unvested Performance-Based Restricted Stock

The following table summarizes changes in performance-based RSUs outstanding:

	Number of Units			Weighted-Average Grant Date Fair Value per Share
	(In thousands)
Unvested performance-based RSUs outstanding at December 31, 2011		4,729		$	5.98
Granted		2,986		$	8.52
Vested		(1,446	)	$	5.85
Forfeited		(593	)	$	6.53
Unvested performance-based RSUs outstanding at September 30, 2012		5,676		$	7.29

Employee Stock Option [Member]

Summary of Weighted Average Assumptions in Fair Value of Option Grant

The fair value of each option grant is estimated as of the date of grant using a reduced-form calibrated binomial lattice model (“lattice model”). The following table summarizes the weighted-average assumptions that the Company applied in the lattice model:

	Three Months Ended						Nine Months Ended
	September 30, 2012			October 2, 2011			September 30, 2012			October 2, 2011
Estimated grant date fair value per share	$	2.50		$	2.37		$	2.84		$	2.14
Expected life (years)		4.46			4.48			4.46			4.51
Risk-free interest rate		1	%		1	%		1	%		2	%
Volatility		52	%		50	%		47	%		47	%

Employee Stock Purchase Plan [Member]

Summary of Weighted Average Assumptions in Fair Value of Option Grant

The following table summarizes the weighted-average assumptions that the Company applied in the calculation of the fair value for the May 2012 and May 2011 grants:

	2012			2011
Estimated grant date fair value per share	$	2.19		$	2.10
Expected life (years)		0.8			0.8
Risk-free interest rate		0.17	%		0.02	%
Volatility		41	%		37	%