Stock-Based Compensation Plans

12 Months Ended

Mar. 31, 2012

Stock-Based Compensation Plans [Abstract]

Stock-Based Compensation Plans

Note 6. 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:

(In thousands)	2012			2011			2010
Stock-based compensation included in:
Cost of revenues	$	5,630		$	4,825		$	5,180
Research and development		32,310			28,780			25,766
Selling, general and administrative		29,478			26,653			24,590
Restructuring charges		—			—			945
Stock-based compensation effect on income before taxes		67,418			60,258			56,481
Income tax effect		(19,214	)		(18,561	)		(17,105	)
Net stock-based compensation effect on net income	$	48,204		$	41,697		$	39,376

In accordance with the authoritative guidance on accounting for share-based payments, the Company adjusts stock-based compensation on a quarterly basis for changes to the estimate of expected equity award forfeitures based on actual forfeiture experience. The effect of adjusting the forfeiture rate for all expense amortization is recognized in the period the forfeiture estimate is changed. The actual forfeiture adjustment in fiscal 2012, 2011 and 2010 were$3.7 million, $5.1 million and $7.7 million, respectively.

As of March 31, 2012 and April 2, 2011, the ending inventory balances included $1.7 million and $1.5 million of capitalized stock-based compensation, respectively. The net stock-based compensation capitalized to or released from inventory during fiscal 2012 and 2011 were immaterial. During fiscal 2012, 2011, and 2010, the tax benefit realized for the tax deduction from option exercises and other awards, including amounts credited to additional paid-in capital, totaled $31.2 million, $25.6 million, and $9.3 million.

The fair values of stock options and stock purchase plan rights under the Company’s equity incentive plans and Employee Stock Purchase Plan 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 per-share weighted-average fair values of stock options granted during fiscal 2012, 2011, and 2010 were $7.63, $6.80, and $5.68, respectively. The per share weighted-average fair values of stock purchase rights granted under the Employee Stock Purchase Plan during fiscal 2012, 2011, and 2010 were $9.42, $8.25, and $6.29, respectively. The fair values of stock options and stock purchase plan rights granted in fiscal 2012, 2011, and 2010 were estimated at the date of grant using the following weighted-average assumptions:

	Stock Options									Employee Stock Purchase Plan
	2012			2011			2010			2012			2011			2010
Expected life of options (years)		5.1			5.1			5.2			1.3			1.3			1.3
Expected stock price volatility		0.31			0.35			0.35			0.29			0.31			0.33
Risk-free interest rate		1.1	%		1.8	%		2.5	%		0.2	%		0.3	%		0.6	%
Dividend yield		2.4	%		2.5	%		2.7	%		2.4	%		2.3	%		2.5	%

The estimated fair values of 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 fiscal 2012, 2011, and 2010 were $33.69, $25.14, and $20.38, respectively. The weighted-average fair values of RSUs granted in fiscal 2012, 2011, and 2010 were calculated based on estimates at the date of grant as follows:

	2012			2011			2010
Risk-free interest rate		0.7	%		1.0	%		1.6	%
Dividend yield		2.2	%		2.5	%		2.7	%

Options outstanding that have vested and are expected to vest in future periods as of March 31, 2012 are as follows:

(Shares and intrinsic value in thousands)	Number of Shares		Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (1)
Vested (i.e., exercisable)		15,349	$	28.78		2.84	$	133,990
Expected to vest		2,323	$	25.51		5.12	$	25,474
Total vested and expected to vest		17,672	$	28.35		3.14	$	159,464
Total outstanding		17,788	$	28.32		3.14	$	160,941

(1) These amounts represent the difference between the exercise price and $36.48, the closing price per share of Xilinx’s stock on March 30, 2012, for all in-the-money options outstanding.

Options outstanding that are expected to vest are net of estimated future option forfeitures in accordance with the authoritative guidance of accounting for share-based payment, which are estimated when compensation costs are recognized. Options with a fair value of $11.5 million completed vesting during fiscal 2012. As of March 31, 2012, total unrecognized stock-based compensation costs related to stock options and Employee Stock Purchase Plan were $15.6 million and $14.3 million, respectively. The total unrecognized stock-based compensation cost for stock options and Employee Stock Purchase Plan is expected to be recognized over a weighted-average period of 2.1 years and 0.9 years, respectively.

Employee Stock Option Plans

Under the Company’s stock option plans (Option Plans), options reserved for future issuance of common shares to employees and directors of the Company total 32.7 million shares as of March 31, 2012, including 14.9 million shares available for future grants under the 2007 Equity Incentive Plan (2007 Equity Plan). Options to purchase shares of the Company’s common stock under the Option Plans are granted at 100% of the fair market value of the stock on the date of grant. The contractual term for stock awards granted under the 2007 Equity Plan is seven years from the grant date. Prior to April 1, 2007, stock options granted by the Company generally expire ten years from the grant date. Stock awards granted to existing and newly hired employees generally vest over a four-year period from the date of grant.

A summary of shares available for grant under the 2007 Equity Plan is as follows:

(Shares in thousands)	Shares Available for Grant
March 28, 2009		11,052
Additional shares reserved		5,000
Stocks options granted		(2,461	)
Stock options cancelled		314
RSUs granted		(1,885	)
RSUs cancelled		302
April 3, 2010		12,322
Additional shares reserved		4,500
Stocks options granted		(2,345	)
Stock options cancelled		365
RSUs granted		(2,043	)
RSUs cancelled		365
April 2, 2011		13,164
Additional shares reserved		4,500
Stocks options granted		(207	)
Stock options cancelled		70
RSUs granted		(2,977	)
RSUs cancelled		358
March 31, 2012		14,908

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

	Options Outstanding
(Shares in thousands)	Number of Shares			Weighted-Average Exercise Price Per Share
March 28, 2009		41,021		$	32.51
Granted		2,461		$	21.19
Exercised		(1,600	)	$	22.95
Forfeited/cancelled/expired		(10,856	)	$	37.04
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		207		$	34.79
Exercised		(3,622	)	$	24.70
Forfeited/cancelled/expired		(3,766	)	$	37.35
March 31, 2012		17,788		$	28.32

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 total pre-tax intrinsic value of options exercised during fiscal 2012 and 2011was $35.6 million and $28.3 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.

Since the Company adopted the policy of retiring all repurchased shares of its common stock, new shares are issued upon employees’ exercise of their stock options.

The following information relates to options outstanding and exercisable under the Option Plans as of March 31, 2012:

	Options Outstanding						Options Exercisable
			Weighted-		Weighted-				Weighted-
(Shares in thousands)			Average		Average				Average
			Remaining		Exercise				Exercise
Range of	Options		Contractual Term		Price Per		Options		Price Per
Exercise Prices	Outstanding		(Years)		Share		Exercisable		Share
$15.95 - $19.98		292		2.9	$	18.29		247	$	18.38
$20.14 - $29.93		12,512		3.6	$	24.30		10,525	$	24.36
$30.04 - $38.51		1,450		3.4	$	34.59		1,043	$	35.12
$40.11 - $42.46		3,534		1.4	$	40.82		3,534	$	40.82
		17,788		3.1	$	28.32		15,349	$	28.78

As of April 2, 2011, 20.8 million options were exercisable at an average price of $30.08.

Restricted Stock Unit Awards

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

	RSUs Outstanding
(Shares and intrinsic value in thousands)	Number of Shares			Weighted- Average Grant- Date Fair Value Per Share		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (1)
March 28, 2009		2,970		$	22.99
Granted		1,885		$	20.38
Vested (2)		(901	)	$	22.16
Cancelled		(302	)	$	22.56
April 3, 2010		3,652		$	21.70
Granted		2,043		$	25.14
Vested (2)		(1,192	)	$	22.23
Cancelled		(288	)	$	21.99
April 2, 2011		4,215		$	23.19
Granted		2,977		$	33.69
Vested (2)		(1,543	)	$	23.11
Cancelled		(410	)	$	25.18
March 31, 2012		5,239		$	29.01		2.7	$	191,126
Expected to vest as of March 31, 2012		4,729		$	29.15		2.6	$	172,513

(1) Aggregate intrinsic value for RSUs represents the closing price per share of Xilinx’s stock on March 30, 2012 of $36.48, multiplied by the number of RSUs outstanding or expected to vest as of March 31, 2012.

(2) The number of RSUs vested includes shares that the Company withheld on behalf of employees to satisfy the statutory tax withholding requirements.

RSUs with a fair value of $35.7 million were vested during fiscal 2012. As of March 31, 2012, total unrecognized stock-based compensation costs related to non-vested RSUs was $116.9 million. The total unrecognized stock-based compensation cost for RSUs is expected to be recognized over a weighted-average period of 2.8 years.

Employee Qualified Stock Purchase Plan

Under the Employee Stock Purchase Plan, qualified employees can obtain a 24-month purchase right to purchase the Company’s common stock at the end of each six-month exercise period. Participation is limited to 15% of the employee’s annual earnings up to a maximum of $21 thousand in a calendar year. Approximately 77% of all eligible employees participate in the Employee Stock Purchase Plan. The purchase price of the stock is 85% of the lower of the fair market value at the beginning of the 24-month offering period or at the end of each six-month exercise period. Employees purchased 1.2 million shares for $33.1 million in fiscal 2012, 2.3 million shares for $33.3 million in fiscal 2011, and 2.0 million shares for $28.0 million in fiscal 2010. As of March 31, 2012, 8.2 million shares were available for future issuance out of the 46.5 million shares authorized.