Stock-Based Compensation Plans

9 Months Ended

Dec. 31, 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:

		September 30,		September 30,		September 30,		September 30,
	Three Months Ended				Nine Months Ended
	December 31,		January 1,		December 31,		January 1,
(In thousands)	2011		2011		2011		2011
Stock-based compensation included in:
Cost of revenues	$	1,350	$	1,092	$	3,944	$	3,671
Research and development		8,655		7,120		23,245		21,665
Selling, general and administrative		7,838		6,542		21,320		19,959
	$	17,843	$	14,754	$	48,509	$	45,295

During the first nine 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 $7.0 million and $385 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 third quarter of fiscal 2012 was $7.95 ($6.53 for the third quarter of fiscal 2011) and for the first nine months of fiscal 2012 was $7.89 ($6.70 for the first nine months of fiscal 2011), which were estimated at the date of grant using the following weighted-average assumptions:

		September 30,			September 30,			September 30,			September 30,
	Three Months Ended						Nine Months Ended
	December 31,			January 1,			December 31,			January 1,
	2011			2011			2011			2011
Expected life of options (years)		5.2			5.2			5.2			5.1
Expected stock price volatility		0.35			0.32			0.32			0.35
Risk-free interest rate		0.9	%		1.4	%		1.4	%		1.8	%
Dividend yield		2.4	%		2.3	%		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 third quarter of fiscal 2012 was $29.47 ($26.09 for the third quarter of fiscal 2011) and for the first nine months of fiscal 2012 was $33.89 ($24.05 for the first nine months of fiscal 2011), which were calculated based on estimates at the date of grant using the following weighted-average assumptions:

		September 30,			September 30,			September 30,			September 30,
	Three Months Ended						Nine Months Ended
	December 31,			January 1,			December 31,			January 1,
	2011			2011			2011			2011
Risk-free interest rate		0.4	%		0.8	%		0.7	%		1.0	%
Dividend yield		2.4	%		2.3	%		2.1	%		2.5	%

Employee Stock Option Plans

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

		September 30,			September 30,
	Options Outstanding
(Shares in thousands)	Number of Shares			Weighted- Average Exercise Price 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		81		$	33.12
Exercised		(2,454	)	$	24.83
Forfeited/cancelled/expired		(3,453	)	$	37.10
December 31, 2011		19,143		$	28.23
Options exercisable at:
December 31, 2011		16,411		$	28.81
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. 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 December 31, 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 nine months ended December 31, 2011 was $3.9 million and $22.2 million, respectively. The total pre-tax intrinsic value of options exercised during the three months and nine months ended January 1, 2011 was $4.1 million and $10.5 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:

		September 30,			September 30,
	RSUs Outstanding
(Shares in thousands)	Number of Shares			Weighted- Average Grant- Date Fair Value 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		2,243		$	33.89
Vested		(1,237	)	$	23.00
Cancelled		(331	)	$	24.65
December 31, 2011		4,890		$	28.04

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:

		September 30,			September 30,
	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 December 31, 2011, 8.9 million shares were available for future issuance.