Stock-Based Compensation Plans

6 Months Ended

Oct. 01, 2011

Stock-Based Compensation Plans [Abstract]

Stock-Based Compensation Plans

Note 7. Stock-Based Compensation Plans

The Company’s equity incentive plans are broad-based, long-term retention programs that cover employees, consultants and non-employee directors of the Company. These plans are intended to attract and retain talented employees, consultants and non-employee directors and to provide such persons with a proprietary interest in the Company.

Stock-Based Compensation

The following table summarizes stock-based compensation expense related to stock awards granted under the Company’s equity incentive plans and rights to acquire stock granted under the Company’s Employee Stock Purchase Plan:

	Three Months Ended				Six Months Ended
	October 1,		October 2,		October 1,		October 2,
(In thousands)	2011		2010		2011		2010
Stock-based compensation included in:
Cost of revenues	$	1,284	$	1,312	$	2,594	$	2,579
Research and development		8,103		7,341		14,590		14,545
Selling, general and administrative		7,512		6,768		13,482		13,417
	$	16,899	$	15,421	$	30,666	$	30,541

During the first six months of fiscal 2012 and 2011, the tax benefit realized for the tax deduction from option exercises and other awards, including amounts credited to additional paid-in capital, totaled $6.5 million and $647 thousand, respectively.

The fair values of stock options and stock purchase plan rights under the Company’s equity incentive plans and Employee Stock Purchase Plan (ESPP) were estimated as of the grant date using the Black-Scholes option pricing model. The Company’s expected stock price volatility assumption for stock options is estimated using implied volatility of the Company’s traded options. The expected life of options granted is based on the historical exercise activity as well as the expected disposition of all options outstanding. The expected life of options granted also considers the actual contractual term. The weighted-average fair values per share of stock options granted during the second quarter of fiscal 2012 was $8.03 ($6.72 for the second quarter of fiscal 2011) and for the first six months of fiscal 2012 was $7.87 ($6.72 for the first six months of fiscal 2011), which were estimated at the date of grant using the following weighted-average assumptions:

	Three Months Ended						Six Months Ended
	October 1,			October 2,			October 1,			October 2,
	2011			2010			2011			2010
Expected life of options (years)		5.2			5.1			5.2			5.1
Expected stock price volatility		0.34			0.36			0.31			0.36
Risk-free interest rate		1.2	%		1.8	%		1.7	%		1.8	%
Dividend yield		2.3	%		2.5	%		2.3	%		2.5	%

The estimated fair values of restricted stock unit (RSU) awards were calculated based on the market price of Xilinx common stock on the date of grant, reduced by the present value of dividends expected to be paid on Xilinx common stock prior to vesting. The per share weighted-average fair values of RSUs granted during the second quarter of fiscal 2012 was $34.33 ($23.90 for the second quarter of fiscal 2011) and for the first six months of fiscal 2012 was $34.13 ($23.91 for the first six months of fiscal 2011), which were calculated based on estimates at the date of grant using the following weighted-average assumptions:

	Three Months Ended						Six Months Ended
	October 1,			October 2,			October 1,			October 2,
	2011			2010			2011			2010
Risk-free interest rate		0.7	%		1.0	%		0.8	%		1.0	%
Dividend yield		2.1	%		2.5	%		2.1	%		2.5	%

Employee Stock Option Plans

A summary of the Company’s option plans activity and related information is as follows:

	Options Outstanding
				Weighted-
				Average
	Number of			Exercise Price
(Shares in thousands)	Shares			Per Share
April 3, 2010		31,026		$	30.51
Granted		2,345		$	26.36
Exercised		(5,704	)	$	25.42
Forfeited/cancelled/expired		(2,698	)	$	50.69
April 2, 2011		24,969		$	29.11
Granted		57		$	33.58
Exercised		(1,959	)	$	24.93
Forfeited/cancelled/expired		(2,344	)	$	36.86
October 1, 2011		20,723		$	28.63
Options exercisable at:
October 1, 2011		17,613		$	29.35
April 2, 2011		20,837		$	30.08

The types of awards allowed under the 2007 Equity Plan include incentive stock options, non-qualified stock options, RSUs, restricted stock and stock appreciation rights. To date, the Company has issued a mix of non-qualified stock options and RSUs under the 2007 Equity Plan. The mix of stock options and RSU awards changes depending upon the grade level of the employees. Employees at the lower grade levels typically receive mostly RSUs and may also receive stock options. Employees at the higher grade levels, including the Company’s executive officers, receive both stock options and RSUs. On August 10, 2011, the stockholders approved an amendment to increase the authorized number of shares reserved for issuance under the 2007 Equity Plan by 4.5 million shares. As of October 1, 2011, 15.7 million shares remained available for grant under the 2007 Equity Plan.

The total pre-tax intrinsic value of options exercised during the three months and six months ended October 1, 2011 was $3.3 million and $18.3 million, respectively. The total pre-tax intrinsic value of options exercised during the three months and six months ended October 2, 2010 was $4.8 million and $6.4 million, respectively. This intrinsic value represents the difference between the exercise price and the fair market value of the Company’s common stock on the date of exercise.

RSU Awards

A summary of the Company’s RSU activity and related information is as follows:

	RSUs Outstanding
				Weighted-
				Average Grant-
	Number of			Date Fair Value
(Shares in thousands)	Shares			Per Share
April 3, 2010		3,652		$	21.70
Granted		2,043		$	25.14
Vested		(1,192	)	$	22.23
Cancelled		(288	)	$	21.99
April 2, 2011		4,215		$	23.19
Granted		2,128		$	34.13
Vested		(1,166	)	$	23.03
Cancelled		(249	)	$	26.95
October 1, 2011		4,928		$	27.91

Employee Stock Purchase Plan

Under the Company’s ESPP, shares are only issued during the second and fourth quarters of each fiscal year. Employees purchased 501 thousand shares for $13.3 million in the second quarter of fiscal 2012 and 958 thousand shares for $13.9 million in the second quarter of fiscal 2011. The per-share weighted-average fair values of stock purchase rights granted under the ESPP during the second quarter of fiscal 2012 and 2011 were $9.37 and $7.82, respectively. The fair values of stock purchase plan rights granted in the second quarter of fiscal 2012 and 2011 were estimated at the date of grant using the following assumptions:

	2012			2011
Expected life of options (years)		1.25			1.25
Expected stock price volatility		0.29			0.33
Risk-free interest rate		0.2	%		0.3	%
Dividend yield		2.4	%		2.3	%

The next scheduled purchase under the ESPP is in the fourth quarter of fiscal 2012. On August 10, 2011, the stockholders approved an amendment to increase the authorized number of shares reserved for issuance under the ESPP by 2.0 million shares. As of October 1, 2011, 8.9 million shares were available for future issuance.