e10vq

0000950123-11-042909.txt : 20110502 0000950123-11-042909.hdr.sgml : 20110502 20110502160654 ACCESSION NUMBER: 0000950123-11-042909 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20110403 FILED AS OF DATE: 20110502 DATE AS OF CHANGE: 20110502 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COGNEX CORP CENTRAL INDEX KEY: 0000851205 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL [3823] IRS NUMBER: 042713778 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-34218 FILM NUMBER: 11800708 BUSINESS ADDRESS: STREET 1: ONE VISION DR CITY: NATICK STATE: MA ZIP: 01760 BUSINESS PHONE: 5086503000 MAIL ADDRESS: STREET 1: ONE VISION DRIVE CITY: NATICK STATE: MA ZIP: 01760 10-Q 1 b85471e10vq.htm FORM 10-Q e10vq

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


þ		Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


		for the quarterly period ended April 3, 2011


o		Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


		for the transition period from to

Commission File Number 001-34218

COGNEX CORPORATION

(Exact name of registrant as specified in its charter)


Massachusetts		04-2713778
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


One Vision Drive Natick, Massachusetts 01760-2059 (508) 650-3000 (Address, including zip code, and telephone number, including
area code, of principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Yes þ		No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).


Yes þ		No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):


Large accelerated filer þ	Accelerated filero	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Yes o		No þ

As of April 3, 2011, there were 41,513,499 shares of Common Stock, $.002 par value, of the registrant outstanding.

INDEX


PART I FINANCIAL INFORMATION

Item 1. Financial Statements (interim periods unaudited)
Consolidated Statements of Operations for the quarters ended April 3, 2011 and April 4, 2010			1
Consolidated Balance Sheets as of April 3, 2011 and December 31, 2010			2
Consolidated Statement of Shareholders’ Equity and Comprehensive Income for the quarter ended April 3, 2011			3
Consolidated Condensed Statements of Cash Flows for the quarters ended April 3, 2011 and April 4, 2010			4
Notes to Consolidated Financial Statements			5

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			15

Item 3. Quantitative and Qualitative Disclosures About Market Risk			20

Item 4. Controls and Procedures			20

PART II OTHER INFORMATION

Item 1. Legal Proceedings			21

Item 1A. Risk Factors			21

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			22

Item 3. Defaults Upon Senior Securities			22

Item 4. (Removed and Reserved)			22

Item 5. Other Information			22

Item 6. Exhibits			22

Signatures			24
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

COGNEX CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)


	Quarter Ended
	April 3,			April 4,
	2011			2010
	(unaudited)
Revenue
Product	$	68,877		$	54,613
Service		5,517			4,354

		74,394			58,967
Cost of revenue
Product		15,099			12,911
Service		3,284			3,030

		18,383			15,941
Gross margin
Product		53,778			41,702
Service		2,233			1,324

		56,011			43,026

Research, development, and engineering expenses		9,482			8,103
Selling, general, and administrative expenses		29,161			23,622
Restructuring charges		—			49


Operating income		17,368			11,252

Foreign currency loss		(59	)		(165	)
Investment income		605			257
Other expense		(205	)		(246	)


Income before income tax expense		17,709			11,098

Income tax expense		4,073			2,553


Net income	$	13,636		$	8,545


Earnings per weighted-average common and common-equivalent share:
Basic	$	0.33		$	0.22
Diluted	$	0.32		$	0.22

Weighted-average common and common-equivalent shares outstanding:
Basic		41,336			39,667

Diluted		42,286			39,683


Cash dividends per common share	$	0.08		$	0.05

The accompanying notes are an integral part of these consolidated financial statements.

COGNEX CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands)


	April 3,			December 31,
	2011			2010
	(unaudited)
ASSETS

Current assets:
Cash and cash equivalents	$	37,014		$	33,203
Short-term investments		170,342			147,823
Accounts receivable, less reserves of $1,244 and $1,235 in 2011 and 2010, respectively		42,124			45,901
Inventories		27,262			22,717
Deferred income taxes		6,312			6,302
Prepaid expenses and other current assets		20,569			23,059


Total current assets		303,623			279,005

Long-term investments		109,069			102,055
Property, plant, and equipment, net		30,063			29,596
Deferred income taxes		15,720			15,555
Intangible assets, net		22,084			23,130
Goodwill		82,524			82,204
Other assets		1,567			1,559


	$	564,650		$	533,104


LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	8,078		$	7,153
Accrued expenses		23,938			29,346
Accrued income taxes		10,107			7,771
Deferred revenue and customer deposits		11,573			10,162


Total current liabilities		53,696			54,432

Reserve for income taxes		5,528			5,361

Commitments and contingencies (Note 7)

Shareholders’ equity:
Common stock, $.002 par value — Authorized: 140,000 shares, issued: 41,513 and 41,065 shares in 2011 and 2010, respectively		83			82
Additional paid-in capital		115,368			102,620
Retained earnings		390,146			379,826
Accumulated other comprehensive loss, net of tax		(171	)		(9,217	)


Total shareholders’ equity		505,426			473,311


	$	564,650		$	533,104

The accompanying notes are an integral part of these consolidated financial statements.

COGNEX CORPORATION

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME
(In thousands)


										Accumulated Other
	Common Stock				Additional Paid-in		Retained			Comprehensive			Comprehensive			Total Shareholders'
	Shares		Par Value		Capital		Earnings			Loss			Income			Equity
Balance as of December 31, 2010		41,065	$	82	$	102,620	$	379,826		$	(9,217	)				$	473,311

Issuance of common stock under stock option plans		448		1		9,516		—			—						9,517

Stock-based compensation expense		—		—		2,352		—			—						2,352

Excess tax benefit from stock option exercises		—		—		880		—			—						880

Payment of dividends		—		—		—		(3,316	)		—						(3,316	)

Comprehensive income:

Net income		—		—		—		13,636			—		$	13,636			13,636

Net unrealized loss on available-for-sale investments, net of tax of $53		—		—		—		—			(558	)		(558	)		(558	)

Foreign currency translation adjustment, net of tax of $327		—		—		—		—			9,604			9,604			9,604


Comprehensive income													$	22,682


Balance as of April 3, 2011 (unaudited)		41,513	$	83	$	115,368	$	390,146		$	(171	)				$	505,426

The accompanying notes are an integral part of these consolidated financial statements.

COGNEX CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)


	Quarter Ended
	April 3,			April 4,
	2011			2010
	(unaudited)
Cash flows from operating activities:
Net income	$	13,636		$	8,545
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expenses		2,352			(33	)
Depreciation of property, plant, and equipment		1,296			1,145
Amortization of intangible assets		1,079			1,235
Amortization of premiums/discounts on investments		1,462			420
Tax effect of stock option exercises		(880	)		(37	)
Change in deferred income taxes		(472	)		(312	)
Change in operating assets and liabilities		2,310			(1,252	)


Net cash provided by operating activities		20,783			9,711

Cash flows from investing activities:
Purchases of investments		(64,270	)		(16,694	)
Maturities and sales of investments		40,096			9,890
Purchases of property, plant, and equipment		(1,577	)		(1,081	)
Cash received related to disposition		—			315


Net cash used in investing activities		(25,751	)		(7,570	)

Cash flows from financing activities:
Issuance of common stock under stock option plans		9,517			120
Stock option buyback		—			(83	)
Payment of dividends		(3,316	)		(1,983	)
Tax effect of stock option exercises		880			37


Net cash provided by (used in) financing activities		7,081			(1,909	)

Effect of foreign exchange rate changes on cash		1,698			(5,399	)


Net increase (decrease) in cash and cash equivalents		3,811			(5,167	)
Cash and cash equivalents at beginning of period		33,203			119,831

Cash and cash equivalents at end of period	$	37,014		$	114,664

The accompanying notes are an integral part of these consolidated financial statements.

COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1: Summary of Significant Accounting Policies

As permitted by the rules of the Securities and Exchange Commission applicable to Quarterly Reports on Form 10-Q, these notes are condensed and do not contain all disclosures required by generally accepted accounting principles. Reference should be made to the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

In the opinion of the management of Cognex Corporation (the “Company”), the accompanying consolidated unaudited financial statements contain all adjustments, consisting of normal, recurring adjustments necessary to present fairly the Company’s financial position as of April 3, 2011, and the results of its operations for the quarters ended April 3, 2011 and April 4, 2010, and changes in shareholders’ equity and cash flows for the periods presented.

The results disclosed in the Consolidated Statements of Operations for the quarter ended April 3, 2011 are not necessarily indicative of the results to be expected for the full year.

NOTE 2: Fair Value Measurements

Financial Assets that are Measured at Fair Value on a Recurring Basis

The following table summarizes the financial assets measured at fair value on a recurring basis as of April 3, 2011 (in thousands):


	Quoted Prices in
	Active Markets for		Significant Other
	Identical Assets		Observable
	(Level 1)		Inputs (Level 2)
Assets:
Money market instruments	$	7,325	$	—
Treasury bills		—		10,385
Municipal bonds		—		111,143
Corporate bonds		—		80,580
Agency bonds		—		40,568
Sovereign bonds		—		24,232
Covered bonds		—		6,570
Currency forward contracts		212		—

The majority of the Company’s investments are reported at fair value based upon model-driven valuations in which all significant inputs are observable or can be derived from or corroborated by observable market data for substantially the full term of the asset, and are therefore classified as Level 2 investments. These investments are priced daily by a large, third-party pricing service. The service maintains regular contact with market makers, brokers, dealers, and analysts to gather information on market movement, direction, trends, and other specific data. They use this information to structure yield curves for various types of debt securities and arrive at the current day’s valuations. The Company’s money market instruments are reported at fair value based upon the daily market price for identical assets in active markets, and are therefore classified as Level 1. The Company did not record an other-than-temporary impairment of investments in the quarter ended April 3, 2011.

The Company’s forward contracts are reported at fair value based upon quoted U.S. Dollar foreign currency exchange rates, and are therefore classified as Level 1.

Financial Assets that are Measured at Fair Value on a Non-recurring Basis

The Company has an interest in a limited partnership, which is accounted for using the cost method and is measured at fair value on a non-recurring basis. The fair value of the Company’s limited partnership interest is based upon valuations of the partnership’s investments as determined by the General Partner. Publicly-traded investments in active markets are reported at the market closing price less a discount, as appropriate, to reflect restricted marketability. Fair value for private investments for which observable

COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

market prices in active markets do not exist is based upon the best information available including the value of a recent financing, reference to observable valuation measures for comparable companies (such as revenue multiples), public or private transactions (such as the sale of a comparable company), and valuations for publicly-traded comparable companies. The amount determined to be fair value also incorporates the General Partner’s own judgment and close familiarity with the business activities of each portfolio company. Management monitors the carrying value of this investment compared to its fair value to determine if an other-than-temporary impairment has occurred. If a decline in fair value is considered to be other-than-temporary, an impairment charge would be recorded to reduce the carrying value of the asset to its fair value. The portfolio consists of securities of public and private companies, and consequently, inputs used in the fair value calculation are classified as Level 3. The Company did not record an other-than-temporary impairment of this asset in the quarter ended April 3, 2011.

Non-financial Assets that are Measured at Fair Value on a Non-recurring Basis

Non-financial assets such as goodwill, intangible assets, and property, plant, and equipment are measured at fair value only when an impairment loss is recognized. The Company did not record an impairment charge related to these assets in the quarter ended April 3, 2011.

NOTE 3: Cash, Cash Equivalents, and Investments

Cash, cash equivalents, and investments consisted of the following (in thousands):


	April 3,		December 31,
	2011		2010
Cash	$	29,689	$	26,650
Money market instruments		7,325		6,553

Cash and cash equivalents		37,014		33,203


Treasury bills		10,385		2,494
Municipal bonds		75,928		75,457
Corporate bonds		48,706		34,543
Agency bonds		21,232		15,979
Sovereign bonds		14,091		19,350

Short-term investments		170,342		147,823


Municipal bonds		35,215		34,794
Corporate bonds		31,874		36,762
Agency bonds		19,336		21,025
Sovereign bonds		10,141		—
Covered bonds		6,570		3,541
Limited partnership interest (accounted for using cost method)		5,933		5,933

Long-term investments		109,069		102,055

	$	316,425	$	283,081

The Company’s portfolio consists of treasury bills, municipal bonds, corporate bonds, agency bonds, sovereign bonds, and covered bonds. Treasury bills consist of debt securities issued by the U.S. government; municipal bonds consist of debt securities issued by state and local government entities; corporate bonds consist of debt securities issued by both international and domestic companies; agency bonds consist of domestic or foreign obligations of government agencies and government sponsored enterprises that have government backing; sovereign bonds consist of direct debt issued by international governments (Germany and the Netherlands as of April 3, 2011); and covered bonds consist of debt securities backed by governments, mortgages, or public sector loans.

The following table summarizes the Company’s available-for-sale investments as of April 3, 2011 (in thousands):

COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


			Gross Unrealized		Gross Unrealized
	Amortized Cost		Gains		Losses			Fair Value
Short-term:
Treasury bills	$	10,380	$	5	$	—		$	10,385
Municipal bonds		75,888		46		(6	)		75,928
Corporate bonds		48,793		9		(96	)		48,706
Agency bonds		21,267		10		(45	)		21,232
Sovereign bonds		14,105		—		(14	)		14,091

Long-term:
Municipal bonds		35,192		65		(42	)		35,215
Corporate bonds		32,467		—		(593	)		31,874
Agency bonds		19,515		28		(207	)		19,336
Sovereign bonds		10,207		—		(66	)		10,141
Covered bonds		6,649		—		(79	)		6,570

	$	274,463	$	163	$	(1,148	)	$	273,478

The following table summarizes the Company’s gross unrealized losses and fair value for available-for-sale investments in an unrealized loss position as of April 3, 2011 (in thousands):


	Fair Value		Unrealized Losses
Municipal bonds	$	29,034	$	(48	)
Corporate bonds		74,716		(689	)
Agency bonds		28,769		(252	)
Sovereign bonds		24,232		(80	)
Covered bonds		6,570		(79	)

	$	163,321	$	(1,148	)

As of April 3, 2011, the Company did not recognize an other-than-temporary impairment as these investments have been in a continuous unrealized loss position for less than twelve months and the Company has the ability and intent to hold these investments to maturity or until the investment’s amortized cost basis has been recovered. The Company recorded gross realized gains and gross realized losses on the sale of debt securities totaling $9,000 and $14,000, respectively, in the first quarter of 2011.

The following table presents the effective maturity dates of the Company’s available-for-sale investments as of April 3, 2011 (in thousands):


	<1 Year		1-2 Years		2-3 Years		3-4 Years		Total
Treasury bills	$	10,385	$	—	$	—	$	—	$	10,385
Municipal bonds		75,928		27,362		6,855		998		111,143
Corporate bonds		48,706		15,362		16,512		—		80,580
Agency bonds		21,232		12,060		7,276		—		40,568
Sovereign bonds		14,091		4,401		1,482		4,258		24,232
Covered bonds		—		4,723		1,847		—		6,570

	$	170,342	$	63,908	$	33,972	$	5,256	$	273,478

In June 2000, the Company became a Limited Partner in Venrock Associates III, L.P. (Venrock), a venture capital fund. A Director of the Company was a General Partner of Venrock Associates through December 31, 2009. The Company has committed to a total investment in the limited partnership of up to $20,500,000, with an expiration date of December 31, 2013. As of April 3, 2011, the Company contributed $19,886,000 to the partnership. The remaining commitment of $614,000 can be called by Venrock at any time before December 31, 2013. Distributions are received and contributions are requested at the discretion of Venrock’s management.

COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 4: Inventories

Inventories consisted of the following (in thousands):


	April 3,		December 31,
	2011		2010
Raw materials	$	17,563	$	14,791
Work-in-process		2,752		2,051
Finished goods		6,947		5,875

	$	27,262	$	22,717

NOTE 5: Intangible Assets and Goodwill

The change in the carrying value of goodwill during the period ($320,000) is wholly attributable to fluctuations in foreign currency exchange rates, as a portion of this asset is recorded on the books of the Company’s Irish subsidiary.

The Company evaluates the possible impairment of goodwill and other intangible assets whenever events or circumstances indicate that the carrying value of these assets may not be recoverable. No triggering event occurred in the quarter ended April 3, 2011 that would indicate a potential impairment of goodwill or other intangible assets. However, the Company continues to monitor market conditions, and changes in market conditions could result in an impairment of goodwill or other intangible assets in a future period.

NOTE 6: Warranty Obligations

The Company warrants its hardware products to be free from defects in material and workmanship for periods primarily ranging from six months to two years from the time of sale based upon the product being purchased and the terms of the customer arrangement. Warranty obligations are evaluated and recorded at the time of sale since it is probable that customers will make claims under warranties related to products that have been sold and the amount of these claims can be reasonably estimated based upon historical costs to fulfill claims. Obligations may also be recorded subsequent to the time of sale whenever specific events or circumstances impacting product quality become known that would not have been taken into account using historical data. Warranty obligations are included in “Accrued expenses” on the Consolidated Balance Sheets.

The changes in the warranty obligation were as follows (in thousands):


Balance as of December 31, 2010	$	1,985
Provisions for warranties issued during the period		475
Fulfillment of warranty obligations		(385	)
Foreign exchange rate changes		96

Balance as of April 3, 2011	$	2,171

NOTE 7: Contingencies

In May 2008, the Company filed a complaint against MvTec Software GmbH, MvTec LLC, and Fuji America Corporation in the United States District Court for the District of Massachusetts alleging infringement of certain patents owned by the Company. In April 2009 and again in June 2009, Defendant MvTec Software GmbH filed re-examination requests of the patents-at-issue with the United States Patent and Trademark Office. This matter is ongoing.

COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

In May 2009, the Company pre-filed a complaint with the United States International Trade Commission (ITC) pursuant to Section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. §1337, against MvTec Software GmbH, MvTec LLC, Fuji America, and several other respondents alleging unfair methods of competition and unfair acts in the unlawful importation into the United States, sale for importation, or sale within the United States after importation. By this filing, the Company requested the ITC to investigate the Company’s contention that certain machine vision software, machine vision systems, and products containing the same infringe, and respondents directly infringe and/or actively induce and/or contribute to the infringement in the United States, of one or more of the Company’s U.S. patents. In July 2009, the ITC issued an order that it would institute an investigation based upon the Company’s assertions. In September 2009, the Company reached a settlement with two of the respondents, and in December 2009, the Company reached a settlement with five additional respondents. In March 2010, the Company reached a settlement with respondent Fuji Machine Manufacturing Co., Ltd. and its subsidiary Fuji America Corporation. These settlements did not have a material impact on the Company’s financial results. An ITC hearing was held in May 2010. In July 2010, the Administrative Law Judge issued an initial determination finding two of the Company’s patents invalid and that respondents did not infringe the patents-at-issue. In September 2010, the Commission issued a notice that it would review the initial determination of the Administrative Law Judge. The ITC issued its Final Determination in November 2010 in which it determined to modify-in-part and affirm-in-part the Administrative Law Judge’s determination, and terminate the investigation with a finding of no violation of Section 337 of the Tariff Act of 1930 (as amended 19 U.S.C. §1337). The Company has filed an appeal of the decision with the United States Court of Appeals for the Federal Circuit.

The Company cannot predict the outcome of the above-referenced pending matters and an adverse resolution of these lawsuits could have a material adverse effect on the Company’s financial position, liquidity, results of operations, and/or indemnification obligations. In addition, various other claims and legal proceedings generally incidental to the normal course of business are pending or threatened on behalf of or against the Company. While we cannot predict the outcome of these incidental matters, we believe that any liability arising from them will not have a material adverse effect on our financial position, liquidity, or results of operations.

NOTE 8: Indemnification Provisions

Except as limited by Massachusetts law, the by-laws of the Company require it to indemnify certain current or former directors, officers, and employees of the Company against expenses incurred by them in connection with each proceeding in which he or she is involved as a result of serving or having served in certain capacities. Indemnification is not available with respect to a proceeding as to which it has been adjudicated that the person did not act in good faith in the reasonable belief that the action was in the best interests of the Company. The maximum potential amount of future payments the Company could be required to make under these provisions is unlimited. The Company has never incurred significant costs related to these indemnification provisions. As a result, the Company believes the estimated fair value of these provisions is minimal.

In the ordinary course of business, the Company may accept standard limited indemnification provisions in connection with the sale of its products, whereby it indemnifies its customers for certain direct damages incurred in connection with third-party patent or other intellectual property infringement claims with respect to the use of the Company’s products. The term of these indemnification provisions generally coincides with the customer’s use of the Company’s products. The maximum potential amount of future payments the Company could be required to make under these provisions is generally subject to fixed monetary limits. The Company has never incurred significant costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the Company believes the estimated fair value of these provisions is minimal.

In the ordinary course of business, the Company also accepts limited indemnification provisions from time to time, whereby it indemnifies customers for certain direct damages incurred in connection with bodily injury and property damage arising from the installation of the Company’s products. The term of these indemnification provisions generally coincides with the period of installation. The maximum potential amount of future payments the Company could be required to make under these provisions is generally limited and is likely recoverable under the Company’s insurance policies. As a result of this coverage,

COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

and the fact that the Company has never incurred significant costs to defend lawsuits or settle claims related to these indemnification provisions, the Company believes the estimated fair value of these provisions is minimal.

NOTE 9: Derivative Instruments

The Company is exposed to certain risks relating to its ongoing business operations including foreign currency exchange rate risk and interest rate risk. The Company does not currently manage its interest rate risk with derivative instruments; however, foreign currency exchange rate risk is currently mitigated with derivative instruments. The Company uses derivative instruments to provide an economic hedge against its transactional currency/functional currency exchange rate exposures. Forward contracts on currencies are entered into to manage the transactional currency/functional currency exposure of the Company’s Irish subsidiary’s accounts receivable denominated in U.S. dollars and intercompany receivables denominated in Japanese Yen. These forward contracts are used to minimize foreign currency gains or losses, as the gains or losses on these contracts are intended to offset the losses or gains on the underlying exposures.

These forward contracts do not qualify for hedge accounting. Both the underlying exposures and the forward contracts are recorded at fair value on the Consolidated Balance Sheets and changes in fair value are reported as “Foreign currency loss” on the Consolidated Statements of Operations. The Company recorded net foreign currency losses of $59,000 and $165,000 as of April 3, 2011 and April 4, 2010, respectively.

As of April 3, 2011, the Company had the following outstanding forward contracts that were entered into to mitigate foreign currency exchange rate risk:


Currency		Amount
Japanese Yen/Euro		225,000,000 Japanese Yen
U.S. Dollar/Euro		12,150,000 U.S. Dollars

Information regarding the fair value of the forward contracts outstanding as of April 3, 2011 and December 31, 2010 was as follows (in thousands):

Asset Derivatives

Liability Derivatives

Fair Value

Balance Sheet

Location

April 3, 2011

December 31, 2010

Location

April 3, 2011

December 31, 2010

Currency forward contracts

Prepaid expenses and other current assets

212

Accrued expenses

—

125

Information regarding the effect of the forward contracts, net of the underlying exposure, on the Consolidated Statements of Operations for the quarter ended April 3, 2011 and April 4, 2010 were as follows (in thousands):

Location

Amount of Gain Recognized in

of Gain Recognized

Income on Derivatives

in Income on

Quarter ended

Derivatives

April 3, 2011

April 4, 2010

Currency forward contracts

Foreign currency gain

COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 10: Stock-Based Compensation

The Company’s share-based payments that result in compensation expense consist solely of stock option grants. As of April 3, 2011, the Company had 7,102,350 shares available for grant under two stock option plans: the 2001 General Stock Option Plan (5,609,990) and the 2007 Stock Option and Incentive Plan (1,492,360). Each of these plans expires ten years from the date the plan was approved. The 2001 General Stock Option Plan will expire in December of 2011. Generally, stock options are granted with an exercise price equal to the market value of the Company’s common stock at the grant date, vest over four years based upon continuous service, and expire ten years from the grant date.

The following table summarizes the Company’s stock option activity for the quarter ended April 3, 2011:

Weighted-

Average

Weighted-

Remaining

Average

Contractual

Aggregate

Shares

Exercise

Term (in

Intrinsic Value

(in thousands)

Price

years)

(in thousands)

Outstanding as of December 31, 2010

4,318

20.05

Granted

857

29.98

Exercised

(449

)

21.20

Forfeited or expired

)

19.33

Outstanding as of April 3, 2011

4,723

21.74

7.2

33,201

Exercisable as of April 3, 2011

1,974

20.60

4.9

15,489

The fair values of stock options granted in each quarter presented were estimated using the following weighted-average assumptions:


	Quarter Ended
	April 3,			April 4,
	2011			2010
Risk-free rate		3.6	%		3.7	%
Expected dividend yield		1.0	%		1.0	%
Expected volatility		42	%		43	%
Expected term (in years)		5.4			5.3

Risk-free rate

The risk-free rate was based upon a treasury instrument whose term was consistent with the contractual term of the option.

Expected dividend yield

The current dividend yield was calculated by annualizing the cash dividend declared by the Company’s Board of Directors for the current quarter and dividing that result by the closing stock price on the grant date. The current dividend yield was then adjusted to reflect the Company’s expectations relative to future dividend declarations.

Expected volatility

The expected volatility was based upon a combination of historical volatility of the Company’s common stock over the contractual term of the option and implied volatility for traded options of the Company’s stock.

Expected term

The expected term was derived from the binomial lattice model from the impact of events that trigger exercises over time.

The weighted-average grant-date fair values of stock options granted during the quarter ended April 3, 2011 and April 4, 2010 were $11.75 and $7.67, respectively.

COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The Company stratifies its employee population into two groups: one consisting of senior management and another consisting of all other employees. The Company currently expects that approximately 66% of its stock options granted to senior management and 68% of its options granted to all other employees will actually vest. Therefore, the Company currently applies an estimated forfeiture rate of 13% to all unvested options for senior management and a rate of 14% for all other employees. The Company revised its estimated forfeiture rates in the first quarter of 2011, and the cumulative effect of this change resulted in a reduction in compensation expense of approximately $80,000.

The total stock-based compensation expense and the related income tax benefit recognized for the quarter ended April 3, 2011 were $2,352,000 and $791,000, respectively. For the quarter ended April 4, 2010, the Company recorded a net benefit from stock options of $33,000 and related tax expense of $20,000. No compensation expense was capitalized as of April 3, 2011 or December 31, 2010.

The following table details the stock-based compensation expense by caption for each quarter presented on the Consolidated Statements of Operations (in thousands):


	Quarter Ended
	April 3,		April 4,
	2011		2010
Product cost of revenue	$	165	$	58
Service cost of revenue		70		1
Research, development, and engineering		809		251
Selling, general, and administrative		1,308		(343	)

	$	2,352	$	(33	)

The total intrinsic values of stock options exercised for the quarter ended April 3, 2011 and April 4, 2010 were $4,668,000 and $13,000, respectively. The total fair values of stock options vested for the quarter ended April 3, 2011 and April 4, 2010 were $7,002,000 and $7,937,000, respectively.

As of April 3, 2011, total unrecognized compensation expense related to non-vested stock options was $11,191,000, which is expected to be recognized over a weighted-average period of 1.9 years.

NOTE 11: Stock Repurchase Program

In April 2008, the Company’s Board of Directors authorized the repurchase of up to $50,000,000 of the Company’s common stock. As of April 3, 2011, the Company had repurchased a total of 1,038,797 shares at a cost of $20,000,000 under this program. The Company did not purchase any shares under this program during the quarter ended April 3, 2011. The Company may repurchase shares under this program in future periods depending upon a variety of factors, including, among other things, stock price levels, share availability, and cash reserve requirements.

NOTE 12: Taxes

A reconciliation of the United States federal statutory corporate tax rate to the Company’s effective tax rate was as follows:


	Quarter Ended
	April 3,			April 4,
	2011			2010
Income tax at federal statutory rate		35	%		35	%
State income taxes, net of federal benefit		1			1
Foreign tax rate differential		(13	)		(13	)

Income tax provision		23	%		23	%

The Company’s effective tax rate was 23% in both the first quarter of 2011 and 2010. There were no discrete tax events in the quarters ended April 3, 2011 or April 4, 2010.

COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

During the quarter ended April 3, 2011, the Company recorded a $149,000 increase in liabilities, net of deferred tax benefit, for uncertain tax positions that were recorded as income tax expense. Estimated interest and penalties included in these amounts totaled $20,000.

The Company’s reserve for income taxes, including gross interest and penalties of $1,209,000, was $5,528,000 as of April 3, 2011. All of the Company’s liabilities for uncertain tax positions are classified as non-current as of April 3, 2011. If the Company’s tax positions were sustained or the statutes of limitations related to certain positions expired, these reserves would be released and income tax expense would be reduced in a future period. As a result of the expiration of certain statutes of limitation, there is a potential that $490,000 of these reserves could be released within the next twelve months, which would decrease income tax expense.

The Company has defined its major tax jurisdictions as the United States, Ireland, China, and Japan, and within the United States, Massachusetts and California. The tax years 2007 through 2010 remain open to examination by various taxing authorities in the jurisdictions in which the Company operates.

The Company is currently negotiating an Advanced Pricing Agreement (APA) with Japan that will cover tax years 2006 through 2012. The Company believes it is adequately reserved for these open years. No formal agreement has been reached between the Tax Authorities in Ireland and Japan as of the date of this filing.

NOTE 13: Weighted-Average Shares

Weighted-average shares were calculated as follows (in thousands):


	Quarter Ended
	April 3,		April 4,
	2011		2010
Basic weighted-average common shares outstanding		41,336		39,667
Effect of dilutive stock options		950		16

Weighted-average common and common-equivalent shares outstanding		42,286		39,683

Stock options to purchase 539,569 and 4,498,540 shares of common stock, on a weighted-average basis, were outstanding for the quarters ended April 3, 2011 and April 4, 2010, respectively, but were not included in the calculation of diluted net income per share because they were anti-dilutive.

NOTE 14: Segment Information

The Company has two reportable segments: the Modular Vision Systems Division (MVSD) and the Surface Inspection Systems Division (SISD). MVSD develops, manufactures, and markets modular vision systems that are used to control the manufacture of discrete items by locating, identifying, inspecting, and measuring them during the manufacturing process. SISD develops, manufactures, and markets surface inspection vision systems that are used to inspect surfaces of materials processed in a continuous fashion, such as metals, papers, non-wovens, plastics, and glass, to ensure there are no flaws or defects on the surfaces. Segments are determined based upon the way that management organizes its business for making operating decisions and assessing performance. The Company evaluates segment performance based upon income or loss from operations, excluding stock-based compensation expense.

COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table summarizes information about the segments (in thousands):


	MVSD		SISD			Reconciling Items			Consolidated
Quarter Ended April 3, 2011
Product revenue	$	62,817	$	6,060		$	—		$	68,877
Service revenue		1,969		3,548			—			5,517
Operating income		22,027		997			(5,656	)		17,368

Quarter Ended April 4, 2010
Product revenue	$	49,660	$	4,953		$	—		$	54,613
Service revenue		1,497		2,857			—			4,354
Operating income (loss)		15,445		(328	)		(3,865	)		11,252

Reconciling items consist of stock-based compensation expense and unallocated corporate expenses, which primarily include corporate headquarters costs, professional fees, and patent infringement litigation. Additional asset information by segment is not produced internally for use by the chief operating decision maker, and therefore, is not presented. Additional asset information is not provided because cash and investments are commingled and the divisions share assets and resources in a number of locations around the world.

NOTE 15: Dividends

On February 10, 2011, the Company announced that the Board of Directors declared a cash dividend of $0.08 per share. The dividend was paid on March 18, 2011 to all shareholders of record at the close of business on March 4, 2011.

On May 2, 2011, the Company’s Board of Directors declared a cash dividend of $0.09 per share. The dividend is payable on June 17, 2011 to all shareholders of record at the close of business on June 3, 2011.

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

Certain statements made in this report, as well as oral statements made by the Company from time to time, constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Readers can identify these forward-looking statements by our use of the words “expects,” “anticipates,” “estimates,” “believes,” “projects,” “intends,” “plans,” “will,” “may,” “shall,” “could,” “should,” and similar words and other statements of a similar sense. These statements are based upon our current estimates and expectations as to prospective events and circumstances, which may or may not be in our control and as to which there can be no firm assurances given. These forward-looking statements, which include statements regarding business and market trends, future financial performance, customer order rates, and growth and strategic plans, involve known and unknown risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include: (1) current and future conditions in the global economy; (2) the cyclicality of the semiconductor and electronics industries; (3) the inability to penetrate new markets; (4) the inability to achieve significant international revenue; (5) fluctuations in foreign currency exchange rates; (6) the loss of a large customer; (7) the inability to attract and retain skilled employees; (8) the reliance upon key suppliers to manufacture and deliver critical components for our products; (9) the failure to effectively manage product transitions or accurately forecast customer demand; (10) the inability to design and manufacture high-quality products; (11) the technological obsolescence of current products and the inability to develop new products; (12) the failure to properly manage the distribution of products and services; (13) the inability to protect our proprietary technology and intellectual property; (14) our involvement in time-consuming and costly litigation; (15) the impact of competitive pressures; (16) the challenges in integrating and achieving expected results from acquired businesses; (17) potential impairment charges with respect to our investments or for acquired intangible assets or goodwill; and (18) exposure to additional tax liabilities. The foregoing list should not be construed as exhaustive and we encourage readers to refer to the detailed discussion of risk factors included in Part I — Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010. The Company cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. The Company disclaims any obligation to subsequently revise forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date such statements are made.

Executive Overview

Cognex Corporation is a leading worldwide provider of machine vision products that capture and analyze visual information in order to automate tasks, primarily in manufacturing processes, where vision is required. Our Modular Vision Systems Division (MVSD) specializes in machine vision systems that are used to automate the manufacture of discrete items, while our Surface Inspection Systems Division (SISD) specializes in machine vision systems that are used to inspect the surfaces of materials processed in a continuous fashion.

In addition to product revenue derived from the sale of machine vision systems, the Company also generates revenue by providing maintenance and support, training, consulting, and installation services to its customers. Our customers can be classified into three primary markets: factory automation, semiconductor and electronics capital equipment, and surface inspection.

•

Factory automation customers purchase Cognex vision products and incorporate them into their manufacturing processes. Virtually every manufacturer can achieve better quality and manufacturing efficiency by using machine vision, and therefore, this segment includes a broad base of customers across a variety of industries, including automotive, consumer electronics, food and beverage, health and beauty, medical devices, packaging, pharmaceutical, and solar. The factory automation market also includes customers who purchase Cognex vision products for use outside of the assembly process, such as using ID products in logistics automation for package sorting and distribution. Sales to factory automation customers represented approximately 70% of total revenue in the first quarter of 2011.

	•		Semiconductor and electronics capital equipment manufacturers purchase Cognex vision products and integrate them into the automation equipment that they manufacture and then sell to their customers to either make semiconductor chips or assemble printed circuit boards. Demand from these capital equipment manufacturers has historically been highly cyclical, with periods of investment followed by downturn. Sales to semiconductor and electronics capital equipment manufacturers represented approximately 17% of total revenue in the first quarter of 2011.

	•		Surface inspection customers are manufacturers of materials processed in a continuous fashion, such as metals, paper, non-wovens, plastics, and glass. These customers need sophisticated machine vision to detect, classify, and analyze defects on the surfaces of those materials as they are being processed at high speeds. Surface inspection sales represented approximately 13% of total revenue in the first quarter of 2011.

Revenue for the first quarter of 2011 totaled $74,394,000, representing an increase of $15,427,000 from the same period in the prior year. The higher revenue contributed to a gross margin of 75% of revenue in the first quarter of 2011, compared to 73% of revenue in the same period in 2010. Operating expenses increased by $5,539,000 over the prior year’s first quarter due primarily to expenses associated with increased headcount in strategic areas and higher stock-based compensation expense. As a result, the Company was able to generate an operating profit of $17,368,000, or 23% of revenue, in the first quarter of 2011, compared to an operating profit of $11,252,000, or 19% of revenue, in the first quarter of 2010.

Results of Operations

Revenue

Revenue for the first quarter of 2011 increased by $15,427,000, or 26%, from the first quarter of 2010 due to higher sales in all three of the Company’s primary markets.

Factory Automation Market

Sales to manufacturing customers in the factory automation area, which are included in the Company’s MVSD segment, represented 70% of total revenue in the first quarter of 2011 compared to 71% in the first quarter of 2010. Sales to these customers increased by $10,383,000, or 25%, from the first quarter of 2010. The largest dollar increases were experienced in the Americas and Europe, where the Company has a broad base of factory automation customers, while the largest percentage increase was experienced in Southeast Asia, where the Company has expanded its sales and support infrastructure, particularly in China, in order to access more of the machine vision market in this high-potential growth region. Although factory automation revenue in Japan was lower in the first quarter of 2011 compared to the prior year, the decline was largely attributed to shipments that were pushed from March to April at customers’ requests after the March 11^th earthquake that hit this region. Although the increase in factory automation revenue was noted across all major product lines, the largest percentage increase came from the ID Products business, where the Company has made significant product investments for the manufacturing sector that we currently serve, as well as for the logistics market that we hope to penetrate with DataMan^® 500 that was introduced early in the first quarter of 2011.

Sales to factory automation customers decreased by $8,495,000, or 14%, from the fourth quarter of 2010. Revenue in the fourth quarter of 2010 included $6,500,000 related to an arrangement with a single customer for which the work was performed over the prior four years, but revenue was deferred until the final obligation was completed in the fourth quarter of 2010. Excluding the recognition of this revenue in the fourth quarter of 2010, sales to these customers decreased by $1,995,000, or 4%, from the prior quarter. A small decrease in revenue from the fourth quarter to the first quarter is not unusual for the factory automation business, as many customers consume their remaining annual capital budgets during the last quarter of the year. Management expects total factory automation revenue to grow in the second quarter of 2011 as compared to the first quarter, despite uncertainty surrounding the market in Japan, as the aftermath of the March earthquake continues to unfold.

Semiconductor and Electronics Capital Equipment Market

Sales to customers who make automation equipment for the semiconductor and electronics industries, which are included in the Company’s MVSD segment, represented 17% of total revenue in the first quarter

of 2011 compared to 16% in the first quarter of 2010. Sales to these customers increased by $3,246,000, or 35%, from the first quarter of 2010. Geographically, revenue increased most significantly in Japan and Southeast Asia, where many of the Company’s semiconductor and electronics capital equipment customers are located. Although sales to these customers increased by $1,094,000, or 10%, from the fourth quarter of 2010, the semiconductor and electronics capital equipment market has historically been highly cyclical and management has limited visibility regarding future order levels from these customers.

Surface Inspection Market

Sales to surface inspection customers, which comprise the Company’s SISD segment, represented 13% of total revenue in both the first quarter of 2011 and 2010. Revenue from these customers increased by $1,798,000, or 23%, from the first quarter of 2010 due to both higher product and service revenue. Sales to the metal and non-woven industries were significantly higher than in the first quarter of 2010. Revenue decreased by $3,125,000, or 25%, from the fourth quarter of 2010, which was a record revenue quarter for the division. The revenue reported each quarter can vary depending upon the timing of customer orders, system deliveries, and installations, as well as the impact of revenue deferrals.

Product Revenue

Product revenue increased by $14,264,000, or 26%, from the first quarter of 2010 due to a higher volume of vision systems sold, primarly to customers in factory automation and the semiconductor and electronics capital equipment markets. The impact of the higher volume was partially offset by lower average selling prices, as the Company introduced new products at lower price points.

Service Revenue

Service revenue, which is derived from the sale of maintenance and support, education, consulting, and installation services increased by $1,163,000, or 27%, from the first quarter of 2010 primarily due to higher revenue from SISD installation services and maintenance support contracts, as well as higher revenue from MVSD consulting services. Service revenue was consistent as a percentage of total revenue at 7% in both the first quarter of 2011 and 2010.

Gross Margin

Gross margin as a percentage of revenue was 75% for the first quarter of 2011 compared to 73% for the first quarter of 2010. This increase was primarily due to higher MVSD product margins.

MVSD Margin

MVSD gross margin as a percentage of revenue was 80% for the first quarter of 2011 compared to 78% for the first quarter of 2010. The increase in MVSD margin was primarily due to manufacturing efficiences achieved from higher revenue levels, as certain fixed manufacturing costs were spread over a higher revenue base.

SISD Margin

SISD gross margin as a percentage of revenue was 46% for the first quarter of 2011 compared to 40% for the first quarter of 2010. The increase in SISD margin was primarily due to improved margins from installation services, as well as improved product margins resulting from increased sales to the metal and non-woven industries, which carry higher margins than sales to the paper industry.

Product Margin

Product gross margin as a percentage of revenue was 78% for the first quarter of 2011 compared to 76% for the first quarter of 2010. This increase was primarily due to higher MVSD product margins as described above.

Service Margin

Service gross margin as a percentage of revenue was 40% for the first quarter of 2011 compared to 30% for the first quarter of 2010. The increase in service margin was primarily due to improved margins from SISD installation services.

Operating Expenses

Research, Development, and Engineering Expenses

Research, development, and engineering (RD&E) expenses for the first quarter of 2011 increased $1,379,000, or 17%, from the prior year. MVSD RD&E expenses increased by $1,461,000, or 20%, and SISD RD&E expenses decreased $82,000, or 9%.

The table below details the $1,461,000 net increase in MVSD RD&E expenses in the first quarter of 2011:


MVSD RD&E balance in Q1 2010	$	7,232
Personnel-related costs		834
Stock-based compensation expense		571
Other		56

MVSD RD&E balance in Q1 2011	$	8,693

Over the past few quarters, the Company has increased RD&E headcount in strategic areas, resulting in higher personnel-related costs, such as salaries, fringe benefits, and recruiting expense. The majority of the headcount increase was in lower-cost regions, such as Hungary. In addition, the Company recorded increased stock-based compensation expense due to the timing of the annual stock option grant, which occurred in the first quarter of 2011 as compared to the second quarter of 2010.

The decrease in SISD RD&E expenses in the first quarter of 2011 was primarily due to a change in personnel mix, resulting in savings in salaries, fringe benefits, company bonus expense, and stock-based compensation expense ($122,000). These savings were partially offset by increased materials costs related to product development efforts ($59,000).

RD&E expenses as a percentage of revenue were 13% in the first quarter of 2011 and 14% in the first quarter of 2010. We believe that a continued commitment to RD&E activities is essential in order to maintain or achieve product leadership with our existing products and to provide innovative new product offerings, and therefore, we expect to continue to make RD&E investments in the future in strategic areas, such as the ID products business and further development of a “Vision System on a Chip.” In addition, we consider our ability to accelerate time to market for new products critical to our revenue growth. Although we target our RD&E spending to be between 10% and 15% of revenue, this percentage is impacted by revenue levels.

Selling, General, and Administrative Expenses

Selling, general, and administrative (SG&A) expenses for the first quarter of 2011 increased by $5,539,000, or 23%, from the prior year. MVSD SG&A expenses increased $5,373,000, or 32%, while SISD SG&A expenses increased $215,000, or 8%. Corporate expenses that are not allocated to either division decreased by $49,000, or 1%.

The table below details the $5,373,000 net increase in MVSD SG&A expenses in the first quarter of 2011:


MVSD SG&A expenses in Q1 2010	$	16,914
Personnel-related costs		2,432
Stock-based compensation expense		1,055
Marketing and promotional expenses		712
Foreign currency exchange rate changes		384
Sales demonstration equipment		213
Other		577

MVSD SG&A expenses in Q1 2011	$	22,287

Over the past few quarters, the Company has increased SG&A headcount in strategic areas, resulting in higher personnel-related costs, such as salaries, fringe benefits, recruiting, commissions, and travel expense. The majority of the headcount increase was in lower-cost regions, such as China. In addition, the Company recorded increased stock-based compensation expense due to the timing of the annual stock option grant, which occurred in the first quarter of 2011 as compared to the second quarter of 2010. Furthermore, stock-based compensation expense in the first quarter of 2010 included a high level of credits related to forfeited options. Other increases included higher spending on marketing and promotional activities intended to grow factory automation revenue, the unfavorable impact of changes in foreign currency exchange rates, primarily the Japanese Yen, and higher spending on sales demonstration equipment as a result of new product offerings.

The increase in SISD SG&A expenses was primarily due to increased bad debt expenses ($102,000), higher stock-based compensation expense due to the timing of the annual stock option grant ($56,000), and the unfavorable impact of changes in foreign currency exchange rates, primarily the Japanese Yen ($39,000).

The decrease in corporate expenses was due to lower legal fees primarily related to patent infringement actions ($1,362,000). These savings were partially offset by increased stock-based compensation and related option valuation fees due to the timing of the annual stock option grant ($582,000), costs associated with the Company’s 30^th Anniversary parties held in the first quarter of 2011 ($480,000), the timing of audit and proxy fees ($148,000), and increased company bonus accruals related to employees assigned to the Company’s corporate departments ($138,000).

Nonoperating Income (Expense)

The Company recorded a foreign currency loss of $59,000 in the first quarter of 2011 compared to a loss of $165,000 for the first quarter of 2010. The foreign currency losses in each period resulted primarily from the revaluation and settlement of accounts receivable and intercompany balances that are reported in one currency and collected in another. Although the foreign currency exposure of accounts receivable is largely mitigated through the use of forward contracts, this program depends upon forecasts of sales and collections, and therefore, gains or losses on the underlying receivables may not perfectly offset losses or gains on the contracts.

Investment income for the first quarter of 2011 increased $348,000, or 135%, from the first quarter of 2010, due to increased investment of the Company’s excess cash. Beginning in the second quarter of 2010, the Board of Directors approved a change to the Company’s investment policy to allow management to invest excess cash accumulated in the Company’s international entities in debt securities. This change in policy has also resulted in increased investment income compared to the first quarter of 2010.

The Company recorded other expense of $205,000 in the first quarter of 2011 compared to other expense of $246,000 in the first quarter of 2010. Other income (expense) includes rental income, net of associated expenses, from leasing buildings adjacent to the Company’s corporate headquarters. A portion of this space is currently unoccupied.

Income Tax Expense

The Company’s effective tax rate was 23% in both the first quarter of 2011 and 2010. There were no discrete tax events in either period.

Liquidity and Capital Resources

The Company has historically been able to generate positive cash flow from operations, which has funded its operating activities and other cash requirements and has resulted in an accumulated cash, cash equivalent, and investment balance of $316,425,000 as of April 3, 2011. The Company has established guidelines relative to credit ratings, diversification, and maturities of its investments that maintain liquidity.

The Company’s cash requirements during the first quarter of 2011 were met with its existing cash balances, cash from investment maturities, positive cash flows from operations, and the proceeds from stock option exercises. Cash requirements primarily consisted of operating activities, purchases of investments, capital expenditures, and the payment of dividends. During the first quarter of 2011, the Company paid out approximately $7,000,000 in company bonuses related to fiscal year 2010, and also made further working capital investments in inventories to support higher anticipated business volumes. Capital expenditures for the first quarter of 2011 totaled $1,577,000 and consisted primarily of expenditures for computer hardware and manufacturing test equipment for new product introductions.

In June 2000, the Company became a Limited Partner in Venrock Associates III, L.P. (Venrock), a venture capital fund. The Company has committed to a total investment in the limited partnership of up to $20,500,000, with the commitment period expiring on December 31, 2013. The Company does not have the right to withdraw from the partnership prior to December 31, 2013. As of April 3, 2011, the Company had contributed $19,886,000 to the partnership. No contributions were made and no distributions were received in the first quarter of 2011. The remaining commitment of $614,000 can be called by Venrock in any period through December 31, 2013.

Beginning in the third quarter of 2003, the Company’s Board of Directors has declared and paid a cash dividend in each quarter, including a dividend of $0.08 per share that amounted to $3,316,000 in the first quarter of 2011. Future dividends will be declared at the discretion of the Company’s Board of Directors and will depend upon such factors as the Board deems relevant including, among other things, the Company’s ability to generate positive cash flows from operations.

In April 2008, the Company’s Board of Directors authorized the repurchase of up to $50,000,000 of the Company’s common stock. As of April 3, 2011, the Company had repurchased 1,038,797 shares at a cost of $20,000,000 under this program. The Company did not purchase any shares under this program during the first quarter of 2011. The Company may repurchase shares under this program in future periods depending upon a variety of factors, including, among other things, the stock price level, share availability, and cash reserve requirements.

The Company believes that its existing cash, cash equivalent, and investment balances, together with cash flow from operations, will be sufficient to meet its operating, investing, and financing activities for the next twelve months. As of April 3, 2011, the Company had approximately $310,492,000 in either cash or investments that could be converted into cash. In addition, Cognex has no long-term debt and does not anticipate needing debt financing in the near future. We believe that our strong cash position has put us in a relatively good postion with respect to our longer-term liquidity needs.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes to the Company’s exposures to market risk since December 31, 2010.

ITEM 4: CONTROLS AND PROCEDURES

As required by Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934, the Company has evaluated, with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, the effectiveness of its disclosure controls and procedures (as defined in such rules) as of the end of the period covered by this report. Based on such evaluation, the Chief Executive Officer and Chief Financial Officer concluded that such disclosure controls and procedures were effective as of that date. From time to time, the Company reviews its disclosure controls and procedures, and may from time to time make changes aimed at enhancing their effectiveness and to ensure that the Company’s systems evolve with its business. There was no change in the Company’s internal control over financial reporting that occurred during the quarter ended April 3, 2011 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

ITEM 1A. RISK FACTORS

For a complete list of factors that could affect the Company’s business, results of operations, and financial condition, see the risk factors discussion provided in Part I — Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010. The language below has been added to an existing risk factor previously defined on Form 10-K to address the current risks associated with international sales.

Economic, political, and other risks associated with international sales and operations could adversely affect our business and operating results.

On March 11, 2011, a large earthquake hit the northeast region of Japan. The majority of our customers located in Japan are outside of the affected areas. Certain customers requested that orders totaling approximately $800,000, originally scheduled for March shipment, be pushed to April. The remaining orders that were on the backlog at the time of

the earthquake, and any new orders, were fulfilled from our Cork, Ireland distribution center. Our Koriyama, Japan distribution center suspended shipments for approximately five weeks, but began shipping product again in April. Cognex does not manufacture in Japan.

Our key suppliers located in Japan have told us that they are up and running, subject to power outages. Cognex has a policy of maintaining strategic inventory reserves of critical components. We have taken action to secure additional reserves of Japanese-manufactured critical parts, such as imagers. For this reason, we do not expect significant supply disruption as result of the earthquake. There is uncertainty, however, regarding how demand from our customers will be impacted in the second quarter and beyond, as the aftermath of this disaster continues to unfold through layers of the supply chain.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table sets forth information with respect to purchases by the Company of shares of its Common Stock during the periods indicated.


							Approximate
					Total Number of		Dollar Value of
					Shares		Shares that
					Purchased as		May Yet Be
	Total				Part of Publicly		Purchased
	Number of		Average		Announced		Under the
	Shares		Price Paid		Plans or		Plans or
	Purchased		per Share		Programs (1)		Programs
January 1 - January 30, 2011		—		—		—	$	30,000,000
January 31 - February 27, 2011		—		—		—	$	30,000,000
February 28 - April 3, 2011		—		—		—	$	30,000,000

Total		—		—		—	$	30,000,000


(1)		In April 2008, the Company’s Board of Directors authorized the repurchase of up to $50,000,000 of the Company’s common stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. REMOVED AND RESERVED

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

31.1 — Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934*

31.2 — Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934*

32.1 — Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

32.2 — Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

101 — xBRL (Extensible Business Reporting Language)

The following materials from Cognex Corporation’s Quarterly Report on Form 10-Q for the period ended April 3, 2011, formatted in xBRL: (i) Consolidated Statements of Operations for the quarter ended April 3, 2011; (ii) Consolidated Balance Sheets as of April 3, 2011 and December 31, 2010; (iii) Consolidated Statement of Shareholders’ Equity and Comprehensive Income for the quarter ended April 3, 2011; (iv) Consolidated Condensed Statements of Cash Flows for the quarter ended April 3, 2011; and (v) Notes to Consolidated Financial Statements.


*		Filed herewith

**		Furnished herewith

***		Pursuant to Rule 406T of Regulation S-T, the xBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Date: May 2, 2011	COGNEX CORPORATION
	By:	/s/ Robert J. Willett
		Robert J. Willett
		President and Chief Executive Officer (duly authorized officer, principal executive officer)



	By:	/s/ Richard A. Morin
		Richard A. Morin
		Executive Vice President of Finance and Chief Financial Officer (duly authorized officer, principal financial and accounting officer)

EX-31.1 2 b85471exv31w1.htm EX-31.1 exv31w1

Exhibit 31.1

CERTIFICATION

I, Robert J. Willett, certify that:

	1.		I have reviewed this quarterly report on Form 10-Q of Cognex Corporation;

	2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4.		The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	(a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: May 2, 2011	By:	/s/ Robert J. Willett
		Robert J. Willett
		President and Chief Executive Officer

EX-31.2 3 b85471exv31w2.htm EX-31.2 exv31w2

Exhibit 31.2

CERTIFICATION

I, Richard A. Morin, certify that:

	1.		I have reviewed this quarterly report on Form 10-Q of Cognex Corporation;

	2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4.		The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	(a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: May 2, 2011	By:	/s/ Richard A. Morin
		Richard A. Morin
		Executive Vice President of Finance and Chief Financial Officer

EX-32.1 4 b85471exv32w1.htm EX-32.1 exv32w1

Exhibit 32.1*

CERTIFICATION PURSUANT TO
18 U.S.C. 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned officer of Cognex Corporation (the “Company”) hereby certifies that the Company’s quarterly report on Form 10-Q for the quarterly period ended April 3, 2011 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Date: May 2, 2011	By:	/s/ Robert J. Willett
		Robert J. Willett
		President and Chief Executive Officer

* This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

EX-32.2 5 b85471exv32w2.htm EX-32.2 exv32w2

Exhibit 32.2*

CERTIFICATION PURSUANT TO
18 U.S.C. 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



Date: May 2, 2011	By:	/s/ Richard A. Morin
		Richard A. Morin
		Executive Vice President of Finance and Chief Financial Officer


*		This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

EX-101.INS 6 cgnx-20110403.xml EX-101 INSTANCE DOCUMENT 0000851205 us-gaap:CommonStockMember 2011-01-01 2011-04-03 0000851205 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2011-04-03 0000851205 us-gaap:RetainedEarningsMember 2011-04-03 0000851205 us-gaap:AdditionalPaidInCapitalMember 2011-04-03 0000851205 us-gaap:AdditionalPaidInCapitalMember 2010-12-31 0000851205 us-gaap:RetainedEarningsMember 2010-12-31 0000851205 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2010-12-31 0000851205 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2011-01-01 2011-04-03 0000851205 us-gaap:RetainedEarningsMember 2011-01-01 2011-04-03 0000851205 us-gaap:ComprehensiveIncomeMember 2011-01-01 2011-04-03 0000851205 us-gaap:CommonStockMember 2011-04-03 0000851205 us-gaap:CommonStockMember 2010-12-31 0000851205 2010-01-01 2010-12-31 0000851205 2010-04-04 0000851205 2009-12-31 0000851205 us-gaap:AdditionalPaidInCapitalMember 2011-01-01 2011-04-03 0000851205 2010-07-04 0000851205 2011-04-03 0000851205 2010-12-31 0000851205 2010-01-01 2010-04-04 0000851205 2011-01-01 2011-04-03 iso4217:USD xbrli:shares xbrli:shares iso4217:USD

<div align="left" style="font-family: 'Arial',Times,serif">   <div align="left"> </div> <div align="center" style="font-size: 10pt; margin-top: 0pt"><b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 1: Summary of Significant Accounting Policies</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">As permitted by the rules of the Securities and Exchange Commission applicable to Quarterly Reports on Form 10-Q, these notes are condensed and do not contain all disclosures required by generally accepted accounting principles. Reference should be made to the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In the opinion of the management of Cognex Corporation (the “Company”), the accompanying consolidated unaudited financial statements contain all adjustments, consisting of normal, recurring adjustments necessary to present fairly the Company’s financial position as of April 3, 2011, and the results of its operations for the quarters ended April 3, 2011 and April 4, 2010, and changes in shareholders’ equity and cash flows for the periods presented. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The results disclosed in the Consolidated Statements of Operations for the quarter ended April 3, 2011 are not necessarily indicative of the results to be expected for the full year. </div> </div>

<div align="left" style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 2: Fair Value Measurements</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><u>Financial Assets that are Measured at Fair Value on a Recurring Basis</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the financial assets measured at fair value on a recurring basis as of April 3, 2011 (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Quoted Prices in</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Active Markets for</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Significant Other</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Identical Assets</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Observable</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(Level 1)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Inputs (Level 2)</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Assets: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Money market instruments </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>7,325</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>—</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Treasury bills </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>10,385</b></td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Municipal bonds </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>111,143</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Corporate bonds </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>80,580</b></td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Agency bonds </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>40,568</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Sovereign bonds </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>24,232</b></td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Covered bonds </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>6,570</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Currency forward contracts </div></td> <td> </td> <td> </td> <td align="right"><b>212</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The majority of the Company’s investments are reported at fair value based upon model-driven valuations in which all significant inputs are observable or can be derived from or corroborated by observable market data for substantially the full term of the asset, and are therefore classified as Level 2 investments. These investments are priced daily by a large, third-party pricing service. The service maintains regular contact with market makers, brokers, dealers, and analysts to gather information on market movement, direction, trends, and other specific data. They use this information to structure yield curves for various types of debt securities and arrive at the current day’s valuations. The Company’s money market instruments are reported at fair value based upon the daily market price for identical assets in active markets, and are therefore classified as Level 1. The Company did not record an other-than-temporary impairment of investments in the quarter ended April 3, 2011. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s forward contracts are reported at fair value based upon quoted U.S. Dollar foreign currency exchange rates, and are therefore classified as Level 1. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><u>Financial Assets that are Measured at Fair Value on a Non-recurring Basis</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company has an interest in a limited partnership, which is accounted for using the cost method and is measured at fair value on a non-recurring basis. The fair value of the Company’s limited partnership interest is based upon valuations of the partnership’s investments as determined by the General Partner. Publicly-traded investments in active markets are reported at the market closing price less a discount, as appropriate, to reflect restricted marketability. Fair value for private investments for which observable market prices in active markets do not exist is based upon the best information available including the value of a recent financing, reference to observable valuation measures for comparable companies (such as revenue multiples), public or private transactions (such as the sale of a comparable company), and valuations for publicly-traded comparable companies. The amount determined to be fair value also incorporates the General Partner’s own judgment and close familiarity with the business activities of each portfolio company. Management monitors the carrying value of this investment compared to its fair value to determine if an other-than-temporary impairment has occurred. If a decline in fair value is considered to be other-than-temporary, an impairment charge would be recorded to reduce the carrying value of the asset to its fair value. The portfolio consists of securities of public and private companies, and consequently, inputs used in the fair value calculation are classified as Level 3. The Company did not record an other-than-temporary impairment of this asset in the quarter ended April 3, 2011. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><u>Non-financial Assets that are Measured at Fair Value on a Non-recurring Basis</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Non-financial assets such as goodwill, intangible assets, and property, plant, and equipment are measured at fair value only when an impairment loss is recognized. The Company did not record an impairment charge related to these assets in the quarter ended April 3, 2011. </div> </div>

<div align="left" style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 3: Cash, Cash Equivalents, and Investments</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Cash, cash equivalents, and investments consisted of the following (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>April 3,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2">December 31,</td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Cash </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>29,689</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">26,650</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Money market instruments </div></td> <td> </td> <td> </td> <td align="right"><b>7,325</b></td> <td> </td> <td> </td> <td> </td> <td align="right">6,553</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Cash and cash equivalents </div></td> <td> </td> <td> </td> <td align="right"><b>37,014</b></td> <td> </td> <td> </td> <td> </td> <td align="right">33,203</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Treasury bills </div></td> <td> </td> <td> </td> <td align="right"><b>10,385</b></td> <td> </td> <td> </td> <td> </td> <td align="right">2,494</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Municipal bonds </div></td> <td> </td> <td> </td> <td align="right"><b>75,928</b></td> <td> </td> <td> </td> <td> </td> <td align="right">75,457</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Corporate bonds </div></td> <td> </td> <td> </td> <td align="right"><b>48,706</b></td> <td> </td> <td> </td> <td> </td> <td align="right">34,543</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Agency bonds </div></td> <td> </td> <td> </td> <td align="right"><b>21,232</b></td> <td> </td> <td> </td> <td> </td> <td align="right">15,979</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Sovereign bonds </div></td> <td> </td> <td> </td> <td align="right"><b>14,091</b></td> <td> </td> <td> </td> <td> </td> <td align="right">19,350</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Short-term investments </div></td> <td> </td> <td> </td> <td align="right"><b>170,342</b></td> <td> </td> <td> </td> <td> </td> <td align="right">147,823</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Municipal bonds </div></td> <td> </td> <td> </td> <td align="right"><b>35,215</b></td> <td> </td> <td> </td> <td> </td> <td align="right">34,794</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Corporate bonds </div></td> <td> </td> <td> </td> <td align="right"><b>31,874</b></td> <td> </td> <td> </td> <td> </td> <td align="right">36,762</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Agency bonds </div></td> <td> </td> <td> </td> <td align="right"><b>19,336</b></td> <td> </td> <td> </td> <td> </td> <td align="right">21,025</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Sovereign bonds </div></td> <td> </td> <td> </td> <td align="right"><b>10,141</b></td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Covered bonds </div></td> <td> </td> <td> </td> <td align="right"><b>6,570</b></td> <td> </td> <td> </td> <td> </td> <td align="right">3,541</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Limited partnership interest (accounted for using cost method) </div></td> <td> </td> <td> </td> <td align="right"><b>5,933</b></td> <td> </td> <td> </td> <td> </td> <td align="right">5,933</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Long-term investments </div></td> <td> </td> <td> </td> <td align="right"><b>109,069</b></td> <td> </td> <td> </td> <td> </td> <td align="right">102,055</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>316,425</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">283,081</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s portfolio consists of treasury bills, municipal bonds, corporate bonds, agency bonds, sovereign bonds, and covered bonds. Treasury bills consist of debt securities issued by the U.S. government; municipal bonds consist of debt securities issued by state and local government entities; corporate bonds consist of debt securities issued by both international and domestic companies; agency bonds consist of domestic or foreign obligations of government agencies and government sponsored enterprises that have government backing; sovereign bonds consist of direct debt issued by international governments (Germany and the Netherlands as of April 3, 2011); and covered bonds consist of debt securities backed by governments, mortgages, or public sector loans. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the Company’s available-for-sale investments as of April 3, 2011 (in thousands): </div>   </div>  <div style="font-family: 'Arial',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Gross Unrealized</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Gross Unrealized</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amortized Cost</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Gains</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Losses</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Short-term: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Treasury bills </div></td> <td> </td> <td align="left">$</td> <td align="right">10,380</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">5</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">10,385</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Municipal bonds </div></td> <td> </td> <td> </td> <td align="right">75,888</td> <td> </td> <td> </td> <td> </td> <td align="right">46</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(6</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">75,928</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Corporate bonds </div></td> <td> </td> <td> </td> <td align="right">48,793</td> <td> </td> <td> </td> <td> </td> <td align="right">9</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(96</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">48,706</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Agency bonds </div></td> <td> </td> <td> </td> <td align="right">21,267</td> <td> </td> <td> </td> <td> </td> <td align="right">10</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(45</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">21,232</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Sovereign bonds </div></td> <td> </td> <td> </td> <td align="right">14,105</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(14</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">14,091</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Long-term: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Municipal bonds </div></td> <td> </td> <td> </td> <td align="right">35,192</td> <td> </td> <td> </td> <td> </td> <td align="right">65</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(42</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">35,215</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Corporate bonds </div></td> <td> </td> <td> </td> <td align="right">32,467</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(593</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">31,874</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Agency bonds </div></td> <td> </td> <td> </td> <td align="right">19,515</td> <td> </td> <td> </td> <td> </td> <td align="right">28</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(207</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">19,336</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Sovereign bonds </div></td> <td> </td> <td> </td> <td align="right">10,207</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(66</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">10,141</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Covered bonds </div></td> <td> </td> <td> </td> <td align="right">6,649</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(79</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">6,570</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>274,463</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>163</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"><b>$</b></td> <td align="right"><b>(1,148</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>273,478</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the Company’s gross unrealized losses and fair value for available-for-sale investments in an unrealized loss position as of April 3, 2011 (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Unrealized Losses</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Municipal bonds </div></td> <td> </td> <td align="left">$</td> <td align="right">29,034</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(48</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Corporate bonds </div></td> <td> </td> <td> </td> <td align="right">74,716</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(689</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Agency bonds </div></td> <td> </td> <td> </td> <td align="right">28,769</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(252</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Sovereign bonds </div></td> <td> </td> <td> </td> <td align="right">24,232</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(80</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Covered bonds </div></td> <td> </td> <td> </td> <td align="right">6,570</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(79</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>163,321</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"><b>$</b></td> <td align="right"><b>(1,148</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">As of April 3, 2011, the Company did not recognize an other-than-temporary impairment as these investments have been in a continuous unrealized loss position for less than twelve months and the Company has the ability and intent to hold these investments to maturity or until the investment’s amortized cost basis has been recovered. The Company recorded gross realized gains and gross realized losses on the sale of debt securities totaling $9,000 and $14,000, respectively, in the first quarter of 2011. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following table presents the effective maturity dates of the Company’s available-for-sale investments as of April 3, 2011 (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="40%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b><1 Year</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>1-2 Years</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2-3 Years</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>3-4 Years</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Total</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Treasury bills </div></td> <td> </td> <td align="left">$</td> <td align="right">10,385</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">10,385</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Municipal bonds </div></td> <td> </td> <td> </td> <td align="right">75,928</td> <td> </td> <td> </td> <td> </td> <td align="right">27,362</td> <td> </td> <td> </td> <td> </td> <td align="right">6,855</td> <td> </td> <td> </td> <td> </td> <td align="right">998</td> <td> </td> <td> </td> <td> </td> <td align="right">111,143</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Corporate bonds </div></td> <td> </td> <td> </td> <td align="right">48,706</td> <td> </td> <td> </td> <td> </td> <td align="right">15,362</td> <td> </td> <td> </td> <td> </td> <td align="right">16,512</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">80,580</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Agency bonds </div></td> <td> </td> <td> </td> <td align="right">21,232</td> <td> </td> <td> </td> <td> </td> <td align="right">12,060</td> <td> </td> <td> </td> <td> </td> <td align="right">7,276</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">40,568</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Sovereign bonds </div></td> <td> </td> <td> </td> <td align="right">14,091</td> <td> </td> <td> </td> <td> </td> <td align="right">4,401</td> <td> </td> <td> </td> <td> </td> <td align="right">1,482</td> <td> </td> <td> </td> <td> </td> <td align="right">4,258</td> <td> </td> <td> </td> <td> </td> <td align="right">24,232</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Covered bonds </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">4,723</td> <td> </td> <td> </td> <td> </td> <td align="right">1,847</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">6,570</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>170,342</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>63,908</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>33,972</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>5,256</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>273,478</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In June 2000, the Company became a Limited Partner in Venrock Associates III, L.P. (Venrock), a venture capital fund. A Director of the Company was a General Partner of Venrock Associates through December 31, 2009. The Company has committed to a total investment in the limited partnership of up to $20,500,000, with an expiration date of December 31, 2013. As of April 3, 2011, the Company contributed $19,886,000 to the partnership. The remaining commitment of $614,000 can be called by Venrock at any time before December 31, 2013. Distributions are received and contributions are requested at the discretion of Venrock’s management. </div>   </div>  <div style="font-family: 'Arial',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> </div>

<div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 4: Inventories</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Inventories consisted of the following (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>April 3,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2">December 31,</td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Raw materials </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>17,563</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">14,791</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Work-in-process </div></td> <td> </td> <td> </td> <td align="right"><b>2,752</b></td> <td> </td> <td> </td> <td> </td> <td align="right">2,051</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Finished goods </div></td> <td> </td> <td> </td> <td align="right"><b>6,947</b></td> <td> </td> <td> </td> <td> </td> <td align="right">5,875</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>27,262</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">22,717</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> </div>

<div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 5: Intangible Assets and Goodwill</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The change in the carrying value of goodwill during the period ($320,000) is wholly attributable to fluctuations in foreign currency exchange rates, as a portion of this asset is recorded on the books of the Company’s Irish subsidiary. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company evaluates the possible impairment of goodwill and other intangible assets whenever events or circumstances indicate that the carrying value of these assets may not be recoverable. No triggering event occurred in the quarter ended April 3, 2011 that would indicate a potential impairment of goodwill or other intangible assets. However, the Company continues to monitor market conditions, and changes in market conditions could result in an impairment of goodwill or other intangible assets in a future period. </div> </div>

<div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 6: Warranty Obligations</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company warrants its hardware products to be free from defects in material and workmanship for periods primarily ranging from six months to two years from the time of sale based upon the product being purchased and the terms of the customer arrangement. Warranty obligations are evaluated and recorded at the time of sale since it is probable that customers will make claims under warranties related to products that have been sold and the amount of these claims can be reasonably estimated based upon historical costs to fulfill claims. Obligations may also be recorded subsequent to the time of sale whenever specific events or circumstances impacting product quality become known that would not have been taken into account using historical data. Warranty obligations are included in “Accrued expenses” on the Consolidated Balance Sheets. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The changes in the warranty obligation were as follows (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="88%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Balance as of December 31, 2010 </div></td> <td> </td> <td align="left">$</td> <td align="right">1,985</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Provisions for warranties issued during the period </div></td> <td> </td> <td> </td> <td align="right">475</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Fulfillment of warranty obligations </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(385</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Foreign exchange rate changes </div></td> <td> </td> <td> </td> <td align="right">96</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Balance as of April 3, 2011 </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>2,171</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> </div>

<div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 7: Contingencies</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In May 2008, the Company filed a complaint against MvTec Software GmbH, MvTec LLC, and Fuji America Corporation in the United States District Court for the District of Massachusetts alleging infringement of certain patents owned by the Company. In April 2009 and again in June 2009, Defendant MvTec Software GmbH filed re-examination requests of the patents-at-issue with the United States Patent and Trademark Office. This matter is ongoing. </div>   </div>  <div style="font-family: 'Arial',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In May 2009, the Company pre-filed a complaint with the United States International Trade Commission (ITC) pursuant to Section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. §1337, against MvTec Software GmbH, MvTec LLC, Fuji America, and several other respondents alleging unfair methods of competition and unfair acts in the unlawful importation into the United States, sale for importation, or sale within the United States after importation. By this filing, the Company requested the ITC to investigate the Company’s contention that certain machine vision software, machine vision systems, and products containing the same infringe, and respondents directly infringe and/or actively induce and/or contribute to the infringement in the United States, of one or more of the Company’s U.S. patents. In July 2009, the ITC issued an order that it would institute an investigation based upon the Company’s assertions. In September 2009, the Company reached a settlement with two of the respondents, and in December 2009, the Company reached a settlement with five additional respondents. In March 2010, the Company reached a settlement with respondent Fuji Machine Manufacturing Co., Ltd. and its subsidiary Fuji America Corporation. These settlements did not have a material impact on the Company’s financial results. An ITC hearing was held in May 2010. In July 2010, the Administrative Law Judge issued an initial determination finding two of the Company’s patents invalid and that respondents did not infringe the patents-at-issue. In September 2010, the Commission issued a notice that it would review the initial determination of the Administrative Law Judge. The ITC issued its Final Determination in November 2010 in which it determined to modify-in-part and affirm-in-part the Administrative Law Judge’s determination, and terminate the investigation with a finding of no violation of Section 337 of the Tariff Act of 1930 (as amended 19 U.S.C. §1337). The Company has filed an appeal of the decision with the United States Court of Appeals for the Federal Circuit. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company cannot predict the outcome of the above-referenced pending matters and an adverse resolution of these lawsuits could have a material adverse effect on the Company’s financial position, liquidity, results of operations, and/or indemnification obligations. In addition, various other claims and legal proceedings generally incidental to the normal course of business are pending or threatened on behalf of or against the Company. While we cannot predict the outcome of these incidental matters, we believe that any liability arising from them will not have a material adverse effect on our financial position, liquidity, or results of operations. </div> </div>

<div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 8: Indemnification Provisions</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Except as limited by Massachusetts law, the by-laws of the Company require it to indemnify certain current or former directors, officers, and employees of the Company against expenses incurred by them in connection with each proceeding in which he or she is involved as a result of serving or having served in certain capacities. Indemnification is not available with respect to a proceeding as to which it has been adjudicated that the person did not act in good faith in the reasonable belief that the action was in the best interests of the Company. The maximum potential amount of future payments the Company could be required to make under these provisions is unlimited. The Company has never incurred significant costs related to these indemnification provisions. As a result, the Company believes the estimated fair value of these provisions is minimal. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In the ordinary course of business, the Company may accept standard limited indemnification provisions in connection with the sale of its products, whereby it indemnifies its customers for certain direct damages incurred in connection with third-party patent or other intellectual property infringement claims with respect to the use of the Company’s products. The term of these indemnification provisions generally coincides with the customer’s use of the Company’s products. The maximum potential amount of future payments the Company could be required to make under these provisions is generally subject to fixed monetary limits. The Company has never incurred significant costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the Company believes the estimated fair value of these provisions is minimal. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In the ordinary course of business, the Company also accepts limited indemnification provisions from time to time, whereby it indemnifies customers for certain direct damages incurred in connection with bodily injury and property damage arising from the installation of the Company’s products. The term of these indemnification provisions generally coincides with the period of installation. The maximum potential amount of future payments the Company could be required to make under these provisions is generally limited and is likely recoverable under the Company’s insurance policies. As a result of this coverage, and the fact that the Company has never incurred significant costs to defend lawsuits or settle claims related to these indemnification provisions, the Company believes the estimated fair value of these provisions is minimal. </div> </div>

<div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 9: Derivative Instruments</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company is exposed to certain risks relating to its ongoing business operations including foreign currency exchange rate risk and interest rate risk. The Company does not currently manage its interest rate risk with derivative instruments; however, foreign currency exchange rate risk is currently mitigated with derivative instruments. The Company uses derivative instruments to provide an economic hedge against its transactional currency/functional currency exchange rate exposures. Forward contracts on currencies are entered into to manage the transactional currency/functional currency exposure of the Company’s Irish subsidiary’s accounts receivable denominated in U.S. dollars and intercompany receivables denominated in Japanese Yen. These forward contracts are used to minimize foreign currency gains or losses, as the gains or losses on these contracts are intended to offset the losses or gains on the underlying exposures. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">These forward contracts do not qualify for hedge accounting. Both the underlying exposures and the forward contracts are recorded at fair value on the Consolidated Balance Sheets and changes in fair value are reported as “Foreign currency loss” on the Consolidated Statements of Operations. The Company recorded net foreign currency losses of $59,000 and $165,000 as of April 3, 2011 and April 4, 2010, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">As of April 3, 2011, the Company had the following outstanding forward contracts that were entered into to mitigate foreign currency exchange rate risk: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="15%"> </td> <td width="25%"> </td> <td width="20%"> </td> <td width="40%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Currency</b></td> <td> </td> <td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Amount</b></td> <td></td> </tr>   <tr valign="bottom"> <td valign="top" nowrap="nowrap"> <div style="margin-left:0px; text-indent:-0px">Japanese Yen/Euro </div></td> <td> </td> <td align="left" valign="top" nowrap="nowrap">225,000,000 Japanese Yen</td> <td></td> </tr> <tr valign="bottom"> <td valign="top"> <div style="margin-left:0px; text-indent:-0px">U.S. Dollar/Euro </div></td> <td> </td> <td align="left" valign="top">12,150,000 U.S. Dollars</td> <td></td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Information regarding the fair value of the forward contracts outstanding as of April 3, 2011 and December 31, 2010 was as follows (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Asset Derivatives</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Liability Derivatives</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Balance Sheet</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Balance Sheet</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Location</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>April 3, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">December 31, 2010</td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Location</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>April 3, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">December 31, 2010</td> <td> </td> </tr>   <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Currency forward contracts </div></td> <td> </td> <td colspan="3" align="center">Prepaid expenses and other current assets</td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>212</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">83</td> <td> </td> <td> </td> <td colspan="3" align="center">Accrued expenses</td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">125</td> <td> </td> </tr>  <tr> <td colspan="27"> <div align="left" style="font-size: 10pt; margin-top: 6pt">Information regarding the effect of the forward contracts, net of the underlying exposure, on the Consolidated Statements of Operations for the quarter ended April 3, 2011 and April 4, 2010 were as follows (in thousands): </div> </td> </tr>  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Location</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>Amount of Gain Recognized in</b></td> <td> </td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>of Gain Recognized</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Income on Derivatives</b></td> <td> </td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>in Income on</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>Quarter ended</b></td> <td> </td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Derivatives</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>April 3, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">April 4, 2010</td> <td> </td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> </tr>   <tr valign="bottom"> <td nowrap="nowrap"> <div style="margin-left:15px; text-indent:-15px">Currency forward contracts </div></td> <td> </td> <td colspan="3" align="center">Foreign currency gain</td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>2</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">67</td> <td> </td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> </tr>  </table> </div>   </div>  <div style="font-family: 'Arial',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> </div>

<div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 10: Stock-Based Compensation</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s share-based payments that result in compensation expense consist solely of stock option grants. As of April 3, 2011, the Company had 7,102,350 shares available for grant under two stock option plans: the 2001 General Stock Option Plan (5,609,990) and the 2007 Stock Option and Incentive Plan (1,492,360). Each of these plans expires ten years from the date the plan was approved. The 2001 General Stock Option Plan will expire in December of 2011. Generally, stock options are granted with an exercise price equal to the market value of the Company’s common stock at the grant date, vest over four years based upon continuous service, and expire ten years from the grant date. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the Company’s stock option activity for the quarter ended April 3, 2011: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Weighted-</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Weighted-</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Remaining</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Contractual</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Aggregate</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Shares</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Exercise</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Term (in</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Intrinsic Value</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(in thousands)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Price</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>years)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(in thousands)</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Outstanding as of December 31, 2010 </div></td> <td> </td> <td> </td> <td align="right">4,318</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">20.05</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Granted </div></td> <td> </td> <td> </td> <td align="right">857</td> <td> </td> <td> </td> <td> </td> <td align="right">29.98</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Exercised </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(449</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">21.20</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Forfeited or expired </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(3</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">19.33</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Outstanding as of April 3, 2011 </div></td> <td> </td> <td> </td> <td align="right"><b>4,723</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>21.74</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>7.2</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>33,201</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Exercisable as of April 3, 2011 </div></td> <td> </td> <td> </td> <td align="right"><b>1,974</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>20.60</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>4.9</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>15,489</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The fair values of stock options granted in each quarter presented were estimated using the following weighted-average assumptions: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>Quarter Ended</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>April 3,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2">April 4,</td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid black"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid black">2010</td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Risk-free rate </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>3.6</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">3.7</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Expected dividend yield </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>1.0</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">1.0</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Expected volatility </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>42</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">43</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Expected term (in years) </div></td> <td> </td> <td> </td> <td align="right"><b>5.4</b></td> <td> </td> <td> </td> <td> </td> <td align="right">5.3</td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><u>Risk-free rate</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The risk-free rate was based upon a treasury instrument whose term was consistent with the contractual term of the option. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><u>Expected dividend yield</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The current dividend yield was calculated by annualizing the cash dividend declared by the Company’s Board of Directors for the current quarter and dividing that result by the closing stock price on the grant date. The current dividend yield was then adjusted to reflect the Company’s expectations relative to future dividend declarations. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><u>Expected volatility</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The expected volatility was based upon a combination of historical volatility of the Company’s common stock over the contractual term of the option and implied volatility for traded options of the Company’s stock. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><u>Expected term</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The expected term was derived from the binomial lattice model from the impact of events that trigger exercises over time. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The weighted-average grant-date fair values of stock options granted during the quarter ended April 3, 2011 and April 4, 2010 were $11.75 and $7.67, respectively. </div>   </div>  <div style="font-family: 'Arial',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company stratifies its employee population into two groups: one consisting of senior management and another consisting of all other employees. The Company currently expects that approximately 66% of its stock options granted to senior management and 68% of its options granted to all other employees will actually vest. Therefore, the Company currently applies an estimated forfeiture rate of 13% to all unvested options for senior management and a rate of 14% for all other employees. The Company revised its estimated forfeiture rates in the first quarter of 2011, and the cumulative effect of this change resulted in a reduction in compensation expense of approximately $80,000. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The total stock-based compensation expense and the related income tax benefit recognized for the quarter ended April 3, 2011 were $2,352,000 and $791,000, respectively. For the quarter ended April 4, 2010, the Company recorded a net benefit from stock options of $33,000 and related tax expense of $20,000. No compensation expense was capitalized as of April 3, 2011 or December 31, 2010. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following table details the stock-based compensation expense by caption for each quarter presented on the Consolidated Statements of Operations (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>Quarter Ended</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>April 3,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2">April 4,</td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Product cost of revenue </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>165</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">58</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Service cost of revenue </div></td> <td> </td> <td> </td> <td align="right"><b>70</b></td> <td> </td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Research, development, and engineering </div></td> <td> </td> <td> </td> <td align="right"><b>809</b></td> <td> </td> <td> </td> <td> </td> <td align="right">251</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Selling, general, and administrative </div></td> <td> </td> <td> </td> <td align="right"><b>1,308</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(343</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>2,352</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(33</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The total intrinsic values of stock options exercised for the quarter ended April 3, 2011 and April 4, 2010 were $4,668,000 and $13,000, respectively. The total fair values of stock options vested for the quarter ended April 3, 2011 and April 4, 2010 were $7,002,000 and $7,937,000, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">As of April 3, 2011, total unrecognized compensation expense related to non-vested stock options was $11,191,000, which is expected to be recognized over a weighted-average period of 1.9 years. </div> </div>

<div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 11: Stock Repurchase Program</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In April 2008, the Company’s Board of Directors authorized the repurchase of up to $50,000,000 of the Company’s common stock. As of April 3, 2011, the Company had repurchased a total of 1,038,797 shares at a cost of $20,000,000 under this program. The Company did not purchase any shares under this program during the quarter ended April 3, 2011. The Company may repurchase shares under this program in future periods depending upon a variety of factors, including, among other things, stock price levels, share availability, and cash reserve requirements. </div> </div>

<div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 12: Taxes</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">A reconciliation of the United States federal statutory corporate tax rate to the Company’s effective tax rate was as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>Quarter Ended</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>April 3,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2">April 4,</td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Income tax at federal statutory rate </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>35</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">35</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">State income taxes, net of federal benefit </div></td> <td> </td> <td> </td> <td align="right"><b>1</b></td> <td> </td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Foreign tax rate differential </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(13</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(13</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Income tax provision </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>23</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">23</td> <td nowrap="nowrap">%</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s effective tax rate was 23% in both the first quarter of 2011 and 2010. There were no discrete tax events in the quarters ended April 3, 2011 or April 4, 2010. </div>   </div>  <div style="font-family: 'Arial',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">During the quarter ended April 3, 2011, the Company recorded a $149,000 increase in liabilities, net of deferred tax benefit, for uncertain tax positions that were recorded as income tax expense. Estimated interest and penalties included in these amounts totaled $20,000. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s reserve for income taxes, including gross interest and penalties of $1,209,000, was $5,528,000 as of April 3, 2011. All of the Company’s liabilities for uncertain tax positions are classified as non-current as of April 3, 2011. If the Company’s tax positions were sustained or the statutes of limitations related to certain positions expired, these reserves would be released and income tax expense would be reduced in a future period. As a result of the expiration of certain statutes of limitation, there is a potential that $490,000 of these reserves could be released within the next twelve months, which would decrease income tax expense. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company has defined its major tax jurisdictions as the United States, Ireland, China, and Japan, and within the United States, Massachusetts and California. The tax years 2007 through 2010 remain open to examination by various taxing authorities in the jurisdictions in which the Company operates. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company is currently negotiating an Advanced Pricing Agreement (APA) with Japan that will cover tax years 2006 through 2012. The Company believes it is adequately reserved for these open years. No formal agreement has been reached between the Tax Authorities in Ireland and Japan as of the date of this filing. </div> </div>

<div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 13: Weighted-Average Shares</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Weighted-average shares were calculated as follows (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>Quarter Ended</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>April 3,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2">April 4,</td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Basic weighted-average common shares outstanding </div></td> <td> </td> <td> </td> <td align="right"><b>41,336</b></td> <td> </td> <td> </td> <td> </td> <td align="right">39,667</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Effect of dilutive stock options </div></td> <td> </td> <td> </td> <td align="right"><b>950</b></td> <td> </td> <td> </td> <td> </td> <td align="right">16</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Weighted-average common and common-equivalent shares outstanding </div></td> <td> </td> <td> </td> <td align="right"><b>42,286</b></td> <td> </td> <td> </td> <td> </td> <td align="right">39,683</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Stock options to purchase 539,569 and 4,498,540 shares of common stock, on a weighted-average basis, were outstanding for the quarters ended April 3, 2011 and April 4, 2010, respectively, but were not included in the calculation of diluted net income per share because they were anti-dilutive. </div> </div>

<div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 14: Segment Information</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company has two reportable segments: the Modular Vision Systems Division (MVSD) and the Surface Inspection Systems Division (SISD). MVSD develops, manufactures, and markets modular vision systems that are used to control the manufacture of discrete items by locating, identifying, inspecting, and measuring them during the manufacturing process. SISD develops, manufactures, and markets surface inspection vision systems that are used to inspect surfaces of materials processed in a continuous fashion, such as metals, papers, non-wovens, plastics, and glass, to ensure there are no flaws or defects on the surfaces. Segments are determined based upon the way that management organizes its business for making operating decisions and assessing performance. The Company evaluates segment performance based upon income or loss from operations, excluding stock-based compensation expense. </div>   </div>  <div style="font-family: 'Arial',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes information about the segments (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>MVSD</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>SISD</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Reconciling <br /> Items</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Consolidated</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Quarter Ended April 3, 2011 </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Product revenue </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>62,817</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>6,060</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>68,877</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Service revenue </div></td> <td> </td> <td> </td> <td align="right"><b>1,969</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>3,548</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>5,517</b></td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Operating income </div></td> <td> </td> <td> </td> <td align="right"><b>22,027</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>997</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(5,656</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td> </td> <td align="right"><b>17,368</b></td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Quarter Ended April 4, 2010 </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Product revenue </div></td> <td> </td> <td align="left">$</td> <td align="right">49,660</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">4,953</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">54,613</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Service revenue </div></td> <td> </td> <td> </td> <td align="right">1,497</td> <td> </td> <td> </td> <td> </td> <td align="right">2,857</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">4,354</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Operating income (loss) </div></td> <td> </td> <td> </td> <td align="right">15,445</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(328</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(3,865</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">11,252</td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Reconciling items consist of stock-based compensation expense and unallocated corporate expenses, which primarily include corporate headquarters costs, professional fees, and patent infringement litigation. Additional asset information by segment is not produced internally for use by the chief operating decision maker, and therefore, is not presented. Additional asset information is not provided because cash and investments are commingled and the divisions share assets and resources in a number of locations around the world. </div> </div>

<div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 15: Dividends</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">On February 10, 2011, the Company announced that the Board of Directors declared a cash dividend of $0.08 per share. The dividend was paid on March 18, 2011 to all shareholders of record at the close of business on March 4, 2011. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">On May 2, 2011, the Company’s Board of Directors declared a cash dividend of $0.09 per share. The dividend is payable on June 17, 2011 to all shareholders of record at the close of business on June 3, 2011. </div> </div> 41702000 53778000 1324000 2233000 23059000 20569000 83000 false --12-31 Q1 2011 2011-04-03 10-Q 0000851205 41513499 Yes Large Accelerated Filer 617469419 COGNEX CORP No Yes

7153000

8078000

45901000

42124000

-420000

-1462000

7771000

10107000

29346000

23938000

-9217000

-171000

102620000

115368000

2352000

880000

1235000

1244000

1235000

1079000

533104000

564650000

279005000

303623000

147823000

170342000

119831000

114664000

33203000

37014000

-5167000

3811000

315000

0.05

0.08

0.002

140000000

41065000

41513000

82000

83000

22682000

15941000

18383000

12911000

15099000

3030000

3284000

-312000

-472000

10162000

11573000

6302000

6312000

15555000

15720000

1145000

1296000

3316000

0.22

0.33

0.22

0.32

-5399000

1698000

37000

880000

37000

880000

23130000

22084000

-165000

-59000

82204000

82524000

43026000

56011000

11098000

17709000

2553000

4073000

1252000

-2310000

22717000

27262000

257000

605000

533104000

564650000

54432000

53696000

5361000

5528000

102055000

109069000

-1909000

7081000

-7570000

-25751000

9711000

20783000

8545000

13636000

11252000

17368000

1559000

1567000

-558000

53000

9604000

327000

-246000

-205000

1983000

3316000

16694000

64270000

1081000

1577000

120000

9517000

9890000

40096000

29596000

30063000

8103000

9482000

49000

379826000

390146000

54613000

68877000

58967000

74394000

4354000

5517000

23622000

29161000

473311000

-9217000

82000

379826000

102620000

505426000

83000

115368000

390146000

-171000

448000

9517000

1000

9516000

-33000

2352000

39683000

42286000

39667000

41336000

EX-101.SCH 7 cgnx-20110403.xsd EX-101 SCHEMA DOCUMENT 0214 - Disclosure - Segment Information link:presentationLink link:calculationLink link:definitionLink 0211 - Disclosure - Stock Repurchase Program link:presentationLink link:calculationLink link:definitionLink 0207 - Disclosure - Contingencies link:presentationLink link:calculationLink link:definitionLink 0206 - Disclosure - Warranty Obligations link:presentationLink link:calculationLink link:definitionLink 0205 - Disclosure - Intangible Assets and Goodwill link:presentationLink link:calculationLink link:definitionLink 0210 - Disclosure - Stock-Based Compensation link:presentationLink link:calculationLink link:definitionLink 0130 - Statement - Consolidated Statement of Shareholders' Equity and Comprehensive Income link:presentationLink link:calculationLink link:definitionLink 0131 - Statement - Consolidated Statement of Shareholders' Equity and Comprehensive Income (Parenthetical) link:presentationLink link:calculationLink link:definitionLink 0121 - Statement - Consolidated Balance Sheets (Parenthetical) link:presentationLink link:calculationLink link:definitionLink 0215 - Disclosure - Dividends link:presentationLink link:calculationLink link:definitionLink 0213 - Disclosure - Weighted-Average Shares link:presentationLink link:calculationLink link:definitionLink 0212 - Disclosure - Taxes link:presentationLink link:calculationLink link:definitionLink 0209 - Disclosure - Derivative Instruments link:presentationLink link:calculationLink link:definitionLink 0208 - Disclosure - Indemnification Provisions link:presentationLink link:calculationLink link:definitionLink 0204 - Disclosure - Inventories link:presentationLink link:calculationLink link:definitionLink 0203 - Disclosure - Cash, Cash Equivalents, and Investments link:presentationLink link:calculationLink link:definitionLink 0202 - Disclosure - Fair Value Measurements link:presentationLink link:calculationLink link:definitionLink 0201 - Disclosure - Summary of Significant Accounting Policies link:presentationLink link:calculationLink link:definitionLink 00 - Document - Document and Entity Information link:presentationLink link:calculationLink link:definitionLink 0140 - Statement - Consolidated Condensed Statements of Cash Flows link:presentationLink link:calculationLink link:definitionLink 0120 - Statement - Consolidated Balance Sheets link:presentationLink link:calculationLink link:definitionLink 0110 - Statement - Consolidated Statements of Operations link:presentationLink link:calculationLink link:definitionLink EX-101.CAL 8 cgnx-20110403_cal.xml EX-101 CALCULATION LINKBASE DOCUMENT EX-101.LAB 9 cgnx-20110403_lab.xml EX-101 LABELS LINKBASE DOCUMENT Consolidated Statements of Operations [Abstract] Diluted Weighted Average Number of Shares Outstanding, Diluted Basic Weighted Average Number of Shares Outstanding, Basic Net Income (Loss) Attributable to Parent Net income Net income Net income Income Tax Expense (Benefit) Income tax expense Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Cumulative Effects of Changes in Accounting Principles, Noncontrolling Interest Income before income tax expense Other Nonoperating Income (Expense) Other expense Foreign Currency Transaction Gain (Loss), before Tax Foreign currency loss Operating Income (Loss) Operating income Selling, general, and administrative expenses Selling, General and Administrative Expense Research, development, and engineering expenses Research and Development Expense Cost of revenue Cost of Goods and Services Sold [Abstract] Service Cost of Services Total cost of revenue Cost of Goods and Services Sold Product Cost of Goods Sold Revenue Sales Revenue, Net [Abstract] Sales Revenue, Net Service Sales Revenue, Services, Net Product Sales Revenue, Goods, Net Consolidated Balance Sheets [Abstract] LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities and Stockholders' Equity [Abstract] Total liabilities and shareholders' equity Liabilities and Stockholders' Equity Shareholders' equity: Stockholders' Equity Attributable to Parent [Abstract] Stockholders' Equity Attributable to Parent Ending Balance (unaudited) Beginning Balance Total shareholders' equity Accumulated Other Comprehensive Income (Loss), Net of Tax Accumulated other comprehensive loss, net of tax Retained earnings Retained Earnings (Accumulated Deficit) Common Stock, Value, Issued Common stock, $.002 par value- Authorized: 140,000 shares, issued: 41,513 and 41,065 shares in 2011 and 2010, respectively Commitments and Contingencies Commitments and contingencies (Note 7) Current liabilities: Liabilities, Current [Abstract] Total current liabilities Liabilities, Current Accrued income taxes Accrued Income Taxes, Current Accrued expenses Accrued Liabilities, Current Accounts payable Accounts Payable, Current ASSETS Assets [Abstract] Total assets Assets Other assets Other Assets, Noncurrent Goodwill Goodwill Deferred income taxes Deferred Tax Assets, Net, Noncurrent Property, plant, and equipment, net Property, Plant and Equipment, Net Long-term investments Long-term Investments Current assets: Assets, Current [Abstract] Total current assets Assets, Current Prepaid expenses and other current assets Prepaid expenses and other current assets Sum of the 1) amounts paid in advance for capitalized costs that will be expensed with the passage of time or the occurrence of a triggering event, and will be charged against earnings within one year or the normal operating cycle, if longer and 2) the aggregate carrying amount, as of the balance sheet date, of current assets not separately presented elsewhere in the balance sheet. Current assets are expected to be realized or consumed within one year (or the normal operating cycle, if longer). Deferred income taxes Deferred Tax Assets, Net, Current Inventories Inventory, Net Cash and Cash Equivalents, at Carrying Value Cash and cash equivalents at end of period Cash and cash equivalents at beginning of period Cash and cash equivalents Common Stock, Shares, Issued Ending Balance, Shares (unaudited) Beginning Balance, Shares Common stock, shares issued Excess tax benefit from stock option exercises Adjustments to Additional Paid in Capital, Tax Effect from Share-based Compensation Other Comprehensive Income, Foreign Currency Transaction and Translation Adjustment, Net of Tax Foreign currency translation adjustment, net of tax of $327 Comprehensive income: Other Comprehensive Income (Loss), Net of Tax [Abstract] Consolidated Condensed Statements of Cash Flows [Abstract] Cash and Cash Equivalents, Period Increase (Decrease) Net increase (decrease) in cash and cash equivalents Effect of foreign exchange rate changes on cash Effect of Exchange Rate on Cash and Cash Equivalents Cash flows from financing activities: Net Cash Provided by (Used in) Financing Activities [Abstract] Net Cash Provided by (Used in) Financing Activities Net cash provided by (used in) financing activities Proceeds from Issuance of Shares under Incentive and Share-based Compensation Plans, Including Stock Options Issuance of common stock under stock option plans Cash flows from investing activities: Net Cash Provided by (Used in) Investing Activities [Abstract] Payments to Acquire Property, Plant, and Equipment Purchases of property, plant, and equipment Proceeds from Sale, Maturity and Collections of Investments Maturities and sales of investments Payments to Acquire Investments Purchases of investments Cash flows from operating activities: Net Cash Provided by (Used in) Operating Activities [Abstract] Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] Adjustments to reconcile net income to net cash provided by operating activities: Net Cash Provided by (Used in) Operating Activities Net cash provided by operating activities Excess Tax Benefit from Share-based Compensation, Operating Activities Tax effect of stock option exercises Inventories [Abstract] Fair Value Measurements [Abstract] Fair Value Measurements. Indemnification Provisions [Abstract] Indemnification Provisions. Indemnification Provisions [Text Block] Indemnification Provisions Indemnification provisions are a potential liability whereby the Company indemnifies certain directors, officers, and employees (current or former) against expenses incurred by them in relation to specific legal proceedings. The Company also indemnifies other parties for specific situations. Derivative Instruments [Abstract] Derivative Instruments Derivative Instruments and Hedging Activities Disclosure [Text Block] Cash, Cash Equivalents, and Investments [Abstract] Cash, Cash Equivalents, and Investments. Cash, Cash Equivalents, and Investments [Text Block] Cash, Cash Equivalents, and Investments Cash and equivalents may include (1) currency on hand, (2) demand deposits with banks or financial institutions, and (3) short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Short term investments may include available-for-sale investments in certain debt and equity securities neither classified as trading or held-to-maturity securities. These securities have original maturities greater than three months and remaining maturities of less than one year. Long-term investments are both available-for-sale securities with remaining maturities of greater than one year and the Company's limited partnership interest. Summary of Significant Accounting Policies Significant Accounting Policies [Text Block] Inventories Inventory Disclosure [Text Block] Commitments and Contingencies Disclosure [Text Block] Contingencies Taxes [Abstract] Taxes Income Tax Disclosure [Text Block] Reserves for accounts receivable Allowance for Doubtful Accounts Receivable, Current Common stock, par value Common Stock, Par or Stated Value Per Share Common stock, shares authorized Common Stock, Shares Authorized Stock-based compensation expense Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition, Value Consolidated Statement of Shareholders' Equity and Comprehensive Income [Abstract] Statement of Shareholders' Equity [Abstract] Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Comprehensive Income Weighted Average Shares [Text Block] Weighted-Average Shares The average number of shares issued and outstanding that are used in the calculation of basic and diluted EPS. Entity Registrant Name Entity Central Index Key Document Type Document Period End Date Amendment Flag Current Fiscal Year End Date Entity Well-known Seasoned Issuer Entity Voluntary Filers Entity Current Reporting Status Entity Filer Category Entity Public Float Entity Common Stock, Shares Outstanding Statement [Table] Statement, Equity Components [Axis] Equity Component [Domain] Parent [Member] Retained Earnings Statement [Line Items] Dividends [Abstract] Total gross margin Gross Profit Gross margin Gross Profit [Abstract] Gross Margin Services Service Aggregate service revenue less cost of service directly attributable to the revenue generation activity. Gross Margin Products Product Aggregate product revenue less cost of goods sold directly attributable to the revenue generation activity. Common Stock, Dividends, Per Share, Cash Paid Short-term investments Available-for-sale Securities, Debt Securities, Current Accounts Receivable, Net, Current Accounts receivable, less reserves of $1,244 and $1,235 in 2011 and 2010, respectively Intangible assets, net Finite-Lived Intangible Assets, Net Reserve for income taxes Liability for Uncertain Tax Positions, Noncurrent Additional paid-in capital Additional Paid in Capital, Common Stock Comprehensive income Comprehensive Income, Net of Tax, Attributable to Parent Tax effect of foreign currency translation adjustment Other Comprehensive Income, Foreign Currency Translation Adjustment, Tax Payments of Dividends, Common Stock Payment of dividends Summary of Significant Accounting Policies [Abstract] Fair Value Measurements Fair Value, Measurement Inputs, Disclosure [Text Block] Total revenue Cash dividends per common share Restructuring, Settlement and Impairment Provisions Restructuring charges Document Fiscal Year Focus Document Fiscal Period Focus Deferred revenue and customer deposits Deferred Revenue and Credits, Current Document and Entity Information [Abstract] Document and Entity Information. Stock Option Plan Expense Stock-based compensation expense Other Comprehensive Income, Available-for-sale Securities Adjustment, Net of Tax Net unrealized loss on available-for-sale investments, net of tax of $53 Tax effect of unrealized loss on available-for-sale investments Other Comprehensive Income, Available-for-sale Securities, Tax Cash Provided by (Used in) Investing Activities, Discontinued Operations Cash received related to disposition Investment Income, Nonoperating Investment income Stock Issued During Period, Value, Stock Options Exercised Issuance of common stock under stock option plans, Value Stock Issued During Period, Shares, Stock Options Exercised Issuance of common stock under stock option plans, Shares Stock option buyback Stock option buyback Cash paid to employees from tender of stock options. Dividends Paid [Text Block] Dividends Payments made during the reporting period to shareholders of record. Deferred Income Tax Expense Benefit Change in deferred income taxes Disclosure of Compensation Related Costs, Share-based Payments [Text Block] Stock-Based Compensation Segment Reporting Disclosure [Text Block] Segment Information Earnings Per Share [Abstract] Earnings per weighted-average common and common-equivalent share: Earnings Per Share, Basic Basic Earnings Per Share, Diluted Diluted Increase (Decrease) in Operating Capital Change in operating assets and liabilities Intangible Assets and Goodwill [Abstract] Intangible Assets and Goodwill. Contingencies [Abstract] Contingencies. Stock Repurchase Program [Abstract] Stock repurchase program. Stock Repurchase Program [Text Block] Stock Repurchase Program Stock repurchase program. Segment Information [Abstract] Segment Information. Goodwill And Intangible Assets Disclosure [Text Block] Intangible Assets and Goodwill Warranty Obligations [Abstract] Product Warranty Disclosure [Text Block] Warranty Obligations Depreciation Depreciation of property, plant, and equipment Amortization Of Intangible Assets Amortization of intangible assets Accretion Amortization Of Discounts And Premiums Investments Amortization of premiums/discounts on investments Net Cash Provided by (Used in) Investing Activities Net cash used in investing activities Excess Tax Benefit from Share-based Compensation, Financing Activities Tax effect of stock option exercises Stock-Based Compensation [Abstract] Weighted-Average Shares [Abstract] Weighted-average common and common-equivalent shares outstanding: Dividends, Common Stock, Cash Payment of dividends EX-101.PRE 10 cgnx-20110403_pre.xml EX-101 PRESENTATION LINKBASE DOCUMENT EX-101.DEF 11 cgnx-20110403_def.xml EX-101 DEFINITION LINKBASE DOCUMENT XML 12 R19.xml IDEA: Taxes 2.2.0.25falsefalse0212 - Disclosure - Taxestruefalsefalse1falsefalseUSDfalsefalse1/1/2011 - 4/3/2011 USD ($) USD ($) / shares $Jan-01-2011_Apr-03-2011http://www.sec.gov/CIK0000851205duration2011-01-01T00:00:002011-04-03T00:00:00USDStandardhttp://www.xbrl.org/2003/iso4217USDiso42170USDEPSDividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0SharesStandardhttp://www.xbrl.org/2003/instancesharesxbrli0USDUSD$2true0us-gaap_IncomeTaxExpenseBenefitAbstractus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringNo definition available.falsefalseTaxes [Abstract]3false0us-gaap_IncomeTaxDisclosureTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseverboselabel1falsefalsefalse00  <div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 12: Taxes</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">A reconciliation of the United States federal statutory corporate tax rate to the Company’s effective tax rate was as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>Quarter Ended</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>April 3,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2">April 4,</td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Income tax at federal statutory rate </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>35</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">35</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">State income taxes, net of federal benefit </div></td> <td> </td> <td> </td> <td align="right"><b>1</b></td> <td> </td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Foreign tax rate differential </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(13</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(13</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Income tax provision </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>23</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">23</td> <td nowrap="nowrap">%</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s effective tax rate was 23% in both the first quarter of 2011 and 2010. There were no discrete tax events in the quarters ended April 3, 2011 or April 4, 2010. </div>   </div>  <div style="font-family: 'Arial',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">During the quarter ended April 3, 2011, the Company recorded a $149,000 increase in liabilities, net of deferred tax benefit, for uncertain tax positions that were recorded as income tax expense. Estimated interest and penalties included in these amounts totaled $20,000. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s reserve for income taxes, including gross interest and penalties of $1,209,000, was $5,528,000 as of April 3, 2011. All of the Company’s liabilities for uncertain tax positions are classified as non-current as of April 3, 2011. If the Company’s tax positions were sustained or the statutes of limitations related to certain positions expired, these reserves would be released and income tax expense would be reduced in a future period. As a result of the expiration of certain statutes of limitation, there is a potential that $490,000 of these reserves could be released within the next twelve months, which would decrease income tax expense. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company has defined its major tax jurisdictions as the United States, Ireland, China, and Japan, and within the United States, Massachusetts and California. The tax years 2007 through 2010 remain open to examination by various taxing authorities in the jurisdictions in which the Company operates. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company is currently negotiating an Advanced Pricing Agreement (APA) with Japan that will cover tax years 2006 through 2012. The Company believes it is adequately reserved for these open years. No formal agreement has been reached between the Tax Authorities in Ireland and Japan as of the date of this filing. </div> </div>    <div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 4: Inventories</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Inventories consisted of the following (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>April 3,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2">December 31,</td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Raw materials </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>17,563</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">14,791</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Work-in-process </div></td> <td> </td> <td> </td> <td align="right"><b>2,752</b></td> <td> </td> <td> </td> <td> </td> <td align="right">2,051</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Finished goods </div></td> <td> </td> <td> </td> <td align="right"><b>6,947</b></td> <td> </td> <td> </td> <td> </td> <td align="right">5,875</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>27,262</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">22,717</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> </div>    <div align="left" style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 3: Cash, Cash Equivalents, and Investments</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Cash, cash equivalents, and investments consisted of the following (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>April 3,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2">December 31,</td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Cash </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>29,689</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">26,650</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Money market instruments </div></td> <td> </td> <td> </td> <td align="right"><b>7,325</b></td> <td> </td> <td> </td> <td> </td> <td align="right">6,553</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Cash and cash equivalents </div></td> <td> </td> <td> </td> <td align="right"><b>37,014</b></td> <td> </td> <td> </td> <td> </td> <td align="right">33,203</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Treasury bills </div></td> <td> </td> <td> </td> <td align="right"><b>10,385</b></td> <td> </td> <td> </td> <td> </td> <td align="right">2,494</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Municipal bonds </div></td> <td> </td> <td> </td> <td align="right"><b>75,928</b></td> <td> </td> <td> </td> <td> </td> <td align="right">75,457</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Corporate bonds </div></td> <td> </td> <td> </td> <td align="right"><b>48,706</b></td> <td> </td> <td> </td> <td> </td> <td align="right">34,543</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Agency bonds </div></td> <td> </td> <td> </td> <td align="right"><b>21,232</b></td> <td> </td> <td> </td> <td> </td> <td align="right">15,979</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Sovereign bonds </div></td> <td> </td> <td> </td> <td align="right"><b>14,091</b></td> <td> </td> <td> </td> <td> </td> <td align="right">19,350</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Short-term investments </div></td> <td> </td> <td> </td> <td align="right"><b>170,342</b></td> <td> </td> <td> </td> <td> </td> <td align="right">147,823</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Municipal bonds </div></td> <td> </td> <td> </td> <td align="right"><b>35,215</b></td> <td> </td> <td> </td> <td> </td> <td align="right">34,794</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Corporate bonds </div></td> <td> </td> <td> </td> <td align="right"><b>31,874</b></td> <td> </td> <td> </td> <td> </td> <td align="right">36,762</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Agency bonds </div></td> <td> </td> <td> </td> <td align="right"><b>19,336</b></td> <td> </td> <td> </td> <td> </td> <td align="right">21,025</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Sovereign bonds </div></td> <td> </td> <td> </td> <td align="right"><b>10,141</b></td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Covered bonds </div></td> <td> </td> <td> </td> <td align="right"><b>6,570</b></td> <td> </td> <td> </td> <td> </td> <td align="right">3,541</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Limited partnership interest (accounted for using cost method) </div></td> <td> </td> <td> </td> <td align="right"><b>5,933</b></td> <td> </td> <td> </td> <td> </td> <td align="right">5,933</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Long-term investments </div></td> <td> </td> <td> </td> <td align="right"><b>109,069</b></td> <td> </td> <td> </td> <td> </td> <td align="right">102,055</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>316,425</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">283,081</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s portfolio consists of treasury bills, municipal bonds, corporate bonds, agency bonds, sovereign bonds, and covered bonds. Treasury bills consist of debt securities issued by the U.S. government; municipal bonds consist of debt securities issued by state and local government entities; corporate bonds consist of debt securities issued by both international and domestic companies; agency bonds consist of domestic or foreign obligations of government agencies and government sponsored enterprises that have government backing; sovereign bonds consist of direct debt issued by international governments (Germany and the Netherlands as of April 3, 2011); and covered bonds consist of debt securities backed by governments, mortgages, or public sector loans. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the Company’s available-for-sale investments as of April 3, 2011 (in thousands): </div>   </div>  <div style="font-family: 'Arial',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Gross Unrealized</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Gross Unrealized</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amortized Cost</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Gains</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Losses</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Short-term: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Treasury bills </div></td> <td> </td> <td align="left">$</td> <td align="right">10,380</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">5</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">10,385</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Municipal bonds </div></td> <td> </td> <td> </td> <td align="right">75,888</td> <td> </td> <td> </td> <td> </td> <td align="right">46</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(6</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">75,928</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Corporate bonds </div></td> <td> </td> <td> </td> <td align="right">48,793</td> <td> </td> <td> </td> <td> </td> <td align="right">9</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(96</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">48,706</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Agency bonds </div></td> <td> </td> <td> </td> <td align="right">21,267</td> <td> </td> <td> </td> <td> </td> <td align="right">10</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(45</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">21,232</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Sovereign bonds </div></td> <td> </td> <td> </td> <td align="right">14,105</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(14</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">14,091</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Long-term: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Municipal bonds </div></td> <td> </td> <td> </td> <td align="right">35,192</td> <td> </td> <td> </td> <td> </td> <td align="right">65</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(42</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">35,215</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Corporate bonds </div></td> <td> </td> <td> </td> <td align="right">32,467</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(593</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">31,874</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Agency bonds </div></td> <td> </td> <td> </td> <td align="right">19,515</td> <td> </td> <td> </td> <td> </td> <td align="right">28</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(207</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">19,336</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Sovereign bonds </div></td> <td> </td> <td> </td> <td align="right">10,207</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(66</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">10,141</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Covered bonds </div></td> <td> </td> <td> </td> <td align="right">6,649</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(79</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">6,570</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>274,463</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>163</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"><b>$</b></td> <td align="right"><b>(1,148</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>273,478</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the Company’s gross unrealized losses and fair value for available-for-sale investments in an unrealized loss position as of April 3, 2011 (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Unrealized Losses</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Municipal bonds </div></td> <td> </td> <td align="left">$</td> <td align="right">29,034</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(48</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Corporate bonds </div></td> <td> </td> <td> </td> <td align="right">74,716</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(689</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Agency bonds </div></td> <td> </td> <td> </td> <td align="right">28,769</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(252</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Sovereign bonds </div></td> <td> </td> <td> </td> <td align="right">24,232</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(80</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Covered bonds </div></td> <td> </td> <td> </td> <td align="right">6,570</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(79</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>163,321</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"><b>$</b></td> <td align="right"><b>(1,148</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">As of April 3, 2011, the Company did not recognize an other-than-temporary impairment as these investments have been in a continuous unrealized loss position for less than twelve months and the Company has the ability and intent to hold these investments to maturity or until the investment’s amortized cost basis has been recovered. The Company recorded gross realized gains and gross realized losses on the sale of debt securities totaling $9,000 and $14,000, respectively, in the first quarter of 2011. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following table presents the effective maturity dates of the Company’s available-for-sale investments as of April 3, 2011 (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="40%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b><1 Year</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>1-2 Years</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2-3 Years</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>3-4 Years</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Total</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Treasury bills </div></td> <td> </td> <td align="left">$</td> <td align="right">10,385</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">10,385</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Municipal bonds </div></td> <td> </td> <td> </td> <td align="right">75,928</td> <td> </td> <td> </td> <td> </td> <td align="right">27,362</td> <td> </td> <td> </td> <td> </td> <td align="right">6,855</td> <td> </td> <td> </td> <td> </td> <td align="right">998</td> <td> </td> <td> </td> <td> </td> <td align="right">111,143</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Corporate bonds </div></td> <td> </td> <td> </td> <td align="right">48,706</td> <td> </td> <td> </td> <td> </td> <td align="right">15,362</td> <td> </td> <td> </td> <td> </td> <td align="right">16,512</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">80,580</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Agency bonds </div></td> <td> </td> <td> </td> <td align="right">21,232</td> <td> </td> <td> </td> <td> </td> <td align="right">12,060</td> <td> </td> <td> </td> <td> </td> <td align="right">7,276</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">40,568</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Sovereign bonds </div></td> <td> </td> <td> </td> <td align="right">14,091</td> <td> </td> <td> </td> <td> </td> <td align="right">4,401</td> <td> </td> <td> </td> <td> </td> <td align="right">1,482</td> <td> </td> <td> </td> <td> </td> <td align="right">4,258</td> <td> </td> <td> </td> <td> </td> <td align="right">24,232</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Covered bonds </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">4,723</td> <td> </td> <td> </td> <td> </td> <td align="right">1,847</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">6,570</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>170,342</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>63,908</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>33,972</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>5,256</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>273,478</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In June 2000, the Company became a Limited Partner in Venrock Associates III, L.P. (Venrock), a venture capital fund. A Director of the Company was a General Partner of Venrock Associates through December 31, 2009. The Company has committed to a total investment in the limited partnership of up to $20,500,000, with an expiration date of December 31, 2013. As of April 3, 2011, the Company contributed $19,886,000 to the partnership. The remaining commitment of $614,000 can be called by Venrock at any time before December 31, 2013. Distributions are received and contributions are requested at the discretion of Venrock’s management. </div>   </div>  <div style="font-family: 'Arial',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> </div>  <!-- Begin Block Tagged NotefalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringCash and equivalents may include (1) currency on hand, (2) demand deposits with banks or financial institutions, and (3) short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Short term investments may include available-for-sale investments in certain debt and equity securities neither classified as trading or held-to-maturity securities. These securities have original maturities greater than three months and remaining maturities of less than one year. Long-term investments are both available-for-sale securities with remaining maturities of greater than one year and the Company's limited partnership interest.No authoritative reference available.falsefalseCash, Cash Equivalents, and Investments12Cash, Cash Equivalents, and InvestmentsUnKnownUnKnownUnKnownUnKnownfalsetrue ZIP 15 0000950123-11-042909-xbrl.zip IDEA: XBRL DOCUMENT begin 644 0000950123-11-042909-xbrl.zip M4$L#!!0````(``N!HCYB71T(]DT``)%-`P`1`!P`8V=N>"TR,#$Q,#0P,RYX M;6Q55`D``S4/OTTU#[]-=7@+``$$)0X```0Y`0``[#W]<]O&L;^_F?<_7-6\ MUIX!18"?(F6G(UM.ZM9.7%OIZYO)C.<(',FK08#!`9+8O_[M[@$$2)$411$D MP"#3)B)P'_N]>W=[BU=_N9^X[%8$2OK>ZS/KW#QCPK-]1WJCUV>1JG%E2WGV ME^__^[]>_:%68_]Z\_D#^U%X(N"A<-B=#,?T[",/OK&W_G06R-$X9"_>OF2# M&?O\F5W[GB=<5\Q8K98,\H8KZ.M[>K3&N96^^RB"$;R3G@JY9POF^'8T$5[8 M9]?]7Z_C'XIQSV%?1!@"E.K7@9QP]UQ);\Q_O1;J6^A/?_7\4*A?[9%W7VN8 MEF6VS.8Y8#J?9Z+G\;T^:]>M.K9AC7ZKUV^9[.JC;G8_"%P&G3SU^FP.C\_]8`2=S&8]@?1,M^R[TONVH3F^'@#Z2?/[!^WOFM3:ZO5Z=7J; M-$5DYBUM?^2)^W/;GQ#L-;-5,YM)2ZG\5L/J;H):MT@Z`)]'G$_G':AQI.KQ M<^S3JYE6K6G-X886\@EDP;>.7)P@;MRIZY?SIDJN(@BTM.K_^OCABST6$UY; MGL`1\@'X\"P+.O"4L5=(TKZB03Z+(2,2]\/95+P^4W(R=7%$>C8.Q/#UV9(( M*>>,U?5`*,EO?2\4]R'(HAV"`FDYAG=V_%PZK\]N8"#Q$1Z,U3O/$:!7UQ/W6E+4,-"W,D MM-.6(1:%_I<0%!][O_LM`O@`@ZGOH4Y>W4MU]GW23&-&B.FQ7M573I$"55^$ MZE5]@0"OIB*0OI/!(>1!>`VP?*_E'_\'8\R?SAL*S\DT0S7!H9U,HU?US."O MZC'O'C+R#7=1XJ[4S\,,#Z]L,$J1B^;PZ\_A6`3(U6D@QDBY6_'U/5C3B3@M M[F9P)I07,-8(Y\-UK?7A`C.39_M@YF<1[73UPZH&%?W_*I#.'W27$KQ1/1?._%2):):4WK6M@PI%DQ+6>FF36K M`4'.?IE6F<,2,*D*0(X3@#R3F1N6!15'#\C1(RPD-K"^LK@GQ]+3U]U3UM75 M2Y!JXZ:P"XV*-44(;NZ$>[M@#^<,RIT93S(BYG9&9$Z./1B1EC8BQR?$`KM1 M$UM[U$2S5R#\S%Y^L7JUKW%Z?K[UM\@MH(IV]Z2B<^DM$GYY!`-%PF_OVP6% M\2.[.=38X>RFK7_C'LZC+?`T`+FI%4*>#V2X_E"K_>+)^;%ST(=Q7M63AZDQ7]V? MAKT6GC^1WKJ!*6V@K\8\$&K=R`^'>%7/8*`;+2'\A4:<(_SX="M'`70?#+&6 M%-D1,!7@G4M>]$$J`"6\B)'TV!L7(G=VPT>8>?*3'XIYF[DOEB,/Q,T&\W!E MVW[D88++)Q]=JE`WP'X]1"P+GS$_8:TF_,D-+V'NZY_?WOS?IW=L'$Y<]NF7 M-Q_>OV5GM7K]?YMOZ_7KFVOVK[_>?/S`K'.3W00<8@/MY.OU=S^=L15I&#>? MZ_/8`1)07PU.KH->O M[I=?+<^]\!+%=EUK&V0%@L,%6)7\C^@SRYR&EVS"`R!7+?2G?08/:&`<8K`X MPV#K"1^29MUT5F-YOI]^OGG'K#[[$DV@X8SY0Y;A%$M9Q1)>Y09<)X;M2C&P MCQ,98AK:8,;"L6!!Y`J%P.$/T,,H`)D4.EOLW;T]YMY(,%Q%2X4Q,.-3C%;Y MP!4L]-D_(K#2(G!G[+.8^D&H"%!H]H,?3`"2VC\,'%@)1LEE#(P*:B*X",QF MPSD<'U^1>G(0=>ZZ$'`KV_71:"@6"(BP`PWNB%+H7'=&DW#;%E-$A*>4G`;2 ML^44,#H'@(8B$)@/I\9^Y,((`HCB$-B(*\RH@/`.Y>0-P79"3^X"/>/07J." M(`:"MMAC%&`&-W(HWX[&P>"?>[,_\,`$1B4,`B\*_6G"IF4P]/7G.PVU/Y4>LC-F_(1[?*1M,3QY2XER M\)\`X.=DF5]@JP3'AGFYA'7#NGQ)G"9NT"O@!T&\0.?(XQ&LB=90?$$*N//O M2(7TW*!!I"(>`WP>4).[!@T?H,@&^"+3@7E`4J50[8#;4Q`DQ&S()4KJ.J:E M$$U];9@9)\T`%R%=W=3JF)=-/3%Z#(/D@]1(J,@-J;G$_TR%)IR:,_PWK2HJ M9OJ#06E`&F_I54L+!,VE*4I*B9+(R$V/?=>!@3/(,$'K4AK-YFK,AJY_EX*B M@R25$$8X>0G;388RL59G%2#&1VP M6:&\%8G`)U"!>(!=@"4X1"`HE?%LPP@D$%5T`V72!Z_J3_/%F0`(&+0^Q'E* M&/0#"/<_N1N)CSK>0EJ^]Z91J*[GYO14HZ%&)AIZ$AUR"8KV&3\T^@P18H01 MRZ"4?["``T3XQP]SNWBEE$"=&?.0U"R&!UQPF`43#2?XOL0NO^%@N@F^*$=P MT=0,?1?L',X94H"B*/2"CDHK]1P1KA&99.!'Y\!N4_A3OS)`^*&+#FU6N`-M M=UZ06?,C!497O>P_):!=>!V#O@9UU-H:]>XS321;N*Z:[:\-K1]U`9XT%@TI_^(?'3PGP)I4^B4VL_GPY07[,^>^E29>653+(<7 MJ-".0]16!G8FT&>W`2AOZ_G`GRJCW]-FLCV//HC^M^)NA40*T MCE-J&D8(;Z;WC):#[(\F_;-(S!:@RC=D-TOQQ^<0\Q5\KMM=##I3A>X%_MWC6:C?11CE1M*\PW&QF5N'BU_ MT[))\FX"VA&8L8&$1?41+.9Z`B3]IR"E'IP/><2D[R MDA/+,JQ6\T1M37*Z)BHARA.#"]-H7Y@E-C97(^'9LTI(\L2@!4+2N3A10_/% MOQ6!```J& M.)1E$'`[EY7[/C36VH.ZEE\/5LG2XE;AJFW`.IU3+S[:^X'^A/_;#S"1*<[: M696V);U;D:1]85)"0$EW#P[U!U0_+YKZ'IOXCG!K3B!OA4>P8HLXW4AZ[&XL M[3&EH*G,08W46[0X@S_?V&=^P.`MIA`Y`L=SV##P)_38#P)_X.N2?P.=LICI M&.]N.3SDE'2DH@'=<)"8WYBF((4BF"3(4]*"SCA#*/#@2$!7P6P77F'&O4X/ MXXK%^\A9VIRS&\K#7";7%`]$'0`$\Z0&,\:9"\P0F,PG`ZTPQG;"OXE`&6P0^/H/1W"7_B"D/.[. M5&PL0I^-.*((``\QW8_R\9!Y\5#@K!`)&$,&.GL<0`;SX\2C^=19386-'"1" M$\@S%BFAIQA+M3`ZS(E[C788`5UF4KA@P:(`R$43THMBF,J!"19)ZC0;D<4;,F9`3&7"`9R2#_>1[M>`("6&)-(XYJB?( M%(@12!A).G/EA#*1T<1Y8(7&@_$>'8CZTM M,$9N3B7S%K"G=#*M+-F&ZQU<#"?-EH$U@XW*2EC&F<6#9CJM]YP*[!EZ&ZPT M$M\-H!EUW5J7?=*#G+-/T<"5MCO#E$V=!K^@M(L6Y(%6Z&1SLD28C)DX%6V5 M7*&@!V4*(^T-A(I/IX$/KT$-#+30(/TNV'M,X`VA$PZKQ^,#Z4*H<*Z%3U,5 M60=];Z$S39.%%=]I;J=NF1IE#>4JE.(;"^)>/J`]8C?0`I:Z%7X+]I>?,IX1#2E+7"N:-#$0UOL$`>&=BASF'$ZG3R%#>?3!'0Z?AHV-ZH2(, M:-`W0\0#\TTB-Z1;$B\--B5VLI10C%)QN:U%:-X7H57I=5(\9J+31)36*SE%F12K$`]1WTD8D?7:O0/>@@,M4):'OBO]!.MS]C&] M/0$N6X9^H%+_#R$!WH7(ZKG,ZEY,#XTHWAW(8`I/YH1@$@BOO<1CKA3-G6^3 M+W'.V7N4+D?8+@WB9<>72M^L<$20$'KM!`99T'02\$\0)[*[Y&Z-]O1Z&!@M MLH6VEROP%W&<"@[D(=):%+)4IJL?Q(!,M`6_8M%%?B:R.Q>HS&T)Z"]^BP!D M%W"(P_@H/KGI8 M&B>_"&T0ZK*U&$DV.;F/$4H/W=$(0BZG+O7AMA5=GIMI0 M!+%#6.?;(:J^&PMO23'`M"C4+)0&6#_^!W5P8VBL7=,#S4JNG>G[:DIDPO0] M2,NJVRM/NCNQSTLL6#"\_Y:K,?X?:VH`A:F\3UWVJ5Y?:;(:>R(%"G]Q MI=EGB(E!_V89A+2297!*-[!RLA$:#KH&)Y;AR`:$L:/!+QSHN#F]3E+=[:CN M=IS`+&M.#]Y[/OPI(QMW2Y=&_UYP7C\) M,;S>G=_I36D3O=%QYW!RF%^";*-G="YZ1Y',99R^>PH"C8[1:>]5`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`%-(29BG<>I2X MUN(2D9B:XO>$D0-T&W<:2"7BRC5C?BNR3=%'PMK[K1JS[EC35:7EYF2E7E!&C3:Q`).+OHJ<@ M@#R#U(^`3O#GO/86=@OAE^MS3^59*?&1#["NTM)Y=;0:L+]&%<:6ZM)M_.0J MP;Y5:0ZT5#^0.5AQ%[J^\LW*,3Y=_?CNS>=W5W]?;IUQBSO774ENDF]#>#,F M_'R6.LH+]'<&>UZY-810E]R(]5QB)(KLA[%-AP7F^&XH_8L7[D\3L`VBL M.$W4TK*EST?O\1V1TA9?2O/WJR_M5NV*W6Z-K\W_V#7WZ_O/.S2@F_L[WT@[ M-+0[GZX>&M`])+(=11+*EZ=9UH_P=MO&Q<5%4.'=NDQ[TXHO-B` MPO*4V.3ED24CJ9!1)D=7Y-L46&2BMW.VWR$AW;E80'%TK5ZWEXJAA:T,L5S@US!1W*9//*_)%(*ME6.8!%TR[0WJ< MQ5).:F=MN"-;.+7+U-#)5>WP377%OVI7M2M`[+CQW=;=PA(=W]@*.D:G=<`3Y$KG2.(MSQO\98GEA4B,!^I-",]Z+@\&IOZ2F*E MGT<+T6Q7A.;W4'2EVRE&J8IJEJ?.LK7W/]6:!?N\&UY`]-(2'&Q?%_P?]RBE MO0&??RK0,TN"]@RSN?/Y\O[$L4[G1> M/'???3OQJ+[$G*0L&-W."=Q/;+2?F[9W-+-2Y`/_1NLY5[B*(QZ;JF&4UZH4 M^2Q1&;9Q\"KQ&;LN^KKJ%Z(<[`3@6/H_FCDI[769VFT6P<+5A+]_('C$?A8U+\6CCD, M*R:X%1#,F(0.,M!?*:`C"R4(V.P1`WV'8""$1X<-6-P_E%[D1P\.,=)C!_Q0 MH"L4?XH<%9OC1@`C`:"A3-GA\%#H[Y9L_?V$!V)7'5UM>W35,HMQ$%/-4LU2S5*T6;8.B4_U>%0# M80(0%OL_P8,BK;'VAJ15:Q!RIUG]O%%KGC!VS5KKA+&[P1#W^9@]OB@K[9%] M&>IQ5V6N*Y#+#?(ABHGG8!R*7-KG>66A#PEIHVLT.^4H0F1<[/[%]D,"VNN5 M@O.6A8<..Q?:WD[O#WYR7MQ4KN=5KSZH9+3+8A.LCM&V2@'I4>*"W<&],(WV M[I^:.5I,4-Q\O&?5S#ZH2C4,LW/`')]G!%E&HUL*>UHRW6^![G=R_J;)H;]^ M5^!>^QOD2=2N!MT`R5[J6@@;#X1C+,/#%E'\*+_#M M;^Q**=^6_]_>MS:WC>2*_A563J9.IHIV1+V5V=TJQW:RGDUB;Y*9.?LI19$M MBQ.*U/!A6_OK#X#NYEL219%Z.+I5=\_$(@DT&D"C\:3BCYN;&U7Y<'YWKKP2 MO_ZL*CIA^P#J,_288NAS*]!M90(&Y[ERH5Q9'C,"U\L4CBB/N@]@WS,`!D]+ ML/!0'BQ]/YB"#7L_5:Z8P69CYL6KZFA8/](:I>M[L/['<&>P*EQ6X`(PJLM) ME*.(ZAO%YFLG,'..B#^UYHA,.,=77[9;:@](1^1[M((IEEZQI[GEZ509A94Q M^/0RW+0.4**X\H6`YHN]L![+L\8AXOY2&ZG#89]*B0`9?"R!)5^UQV:ZY6`M M#U\S+0_@O>SSNB,"8P#68]PAVT:_XB(BM1XH"#2P9E@3-G%A&U?KBW]EGT[8#B1U$WUFV8LWRO]> M>)9N_Z_Z%:CFJS[SK,2]*B.[,N^VC/2VA/1&WQFGD1^O7DO\A[^]-NZ=IS>7 MNC_%_W_]5VC!%1'+L"X<\R8NROH*]L];&XC_#_S(WZ3BHC^!^KJ_ASW[Y`8X M235^@N??+G\F],_N=7W^!N$X(/X+8!K#=GU0$1$\XA+XQVWEU__<72O38`;JXK>W'VXNE1=GKU__T;E\_?KJ MZY7R?__\^O&#HIVWE*^>[O":1=U^_?KZTPOEQ30(YF]>OWY\?#Q_[)R[WOWK MKY]?/^&W-'Q9_.=9D'CSW`S,%\M3C_-+[RIG2IEE-\!?Y<\&K3W/6.R?;K]> M*]TWBD392O9B:^QDBF`A$_@6*09Q0L1UB:>"P%].O2R/'TKIJ^SA%VNE-`<9 M,TI'W8L'8S.Q8L$6G,<'OM<;+0S64VM8\)E4+GW6'['H MGZ'YL9/"I8C!MG?FJ[T#&8^Q615+5QU43Z-:HI>:SU#YP_6^PU_/YG!S8_Z! MY:A$2DL=]/82-JB.>UMM]1KFAAVKE'>68_E3[*[BNH>6S"09I:^.1/;-T3!* M3QT.ZBY^._8`RQ*3X2`"]\]E'7L[<8XTR:`]4-O]PXA=;];6'0Y/K7)&XC-5 M,'4)YRFT5I6)Z@FM)1WE9=RV37C'WX,Y]&C9-CGD`]VYMP#M"]]G@?_\_>6] MA+]\,T(]AQYTB;G"4:?.?W)IL?IOR*F.<4!C"A@P&=@T=,];H".=3Y]R M)V1_(S**&7K4^0^#B4`8UU1>O>RT*<3YLV+YRN/4M>V%H@<\C$>2%KB$Z,0. MC2#4>6C/HKZ05)YDA)Y')8SL2:"!URZWU>V&KSQX#ZA^.'8MTQ+]Q9-]DF4,5F&5*0P.%'-]7W:ZD2WS22! M<>NI.R?VO)1LH7.V>)PRASTP/@N,/5!G1-=3#,LSPID/3\-U&EXS+0,#R\%4 M1$SSV\G[9XJOSO0%-0@=,]GS$G>-4^:3J\!&@NS1KA-(Q35HQTS)+;+U)'-P M-Y;T:"1D'MW0-F,$<7.QK2<(&P%;0A',`2@FR+GR3_<1"9(/@EM.R'A74->Q M`C$^#7;J.S`/_&Z2\D$>`W)SKB.>S#T!_XDX>\P/[4`,6%N*)P%9MGG4+W42 M4K(#%YT5S%=TR&RFZYHX=NX\UP09_@/X27>"'R`TVT\<->L7?XC'2_^-(C%6 M;L?P4:Y_=W*HQ"D[A`"(`#40]LQ'3.R8=*2;#%K)"'+D[ MF<3TT?6^SV`S,<5&#D3D@N3#QRP"`;J*/N5;3[+3,&;`/+K*`ENK M\1]195#J"@@QM>0=ZSYL?#@7;7H%@OQ@8?C->>B!KO!YO@I_GWFSZ,`Q0A_N MKR#\M%Z1@1*3WXW)3YDM\ER(LU^B(TTH[A1VO@7J'4B(9Q^@-N9'*ZI5"1<. M"-1#,_T[X&+KU@R;,H.I+3?`8K(ML:V+Y*9X$_!#<7-G'[LLRT7J,S?DNHZ? M&^+;(BT(^Y6!<(V!]LP'C'69$I4@)QS<&+4W8">QU3+MQB2T)X@N_]IYDCOI M2-)MWY5G$A$%3VU,!N)]H.61GZ*1/"`5[)5L32QC^2D)K&D$M*FP[. M\0-R<<*2G_B3RE#TH$1I5[%SW3H$`=/O0? MJEPX?>06.YN.*\:G:H,:LN.>J7S4)2//),ZTW@?5A-OO,BH-P@J02_*N8M-! ML+R>OPMPD'`!;D:(0W0'#MXH*;1CQ=.0O^#&43[JBU0IX3#MK0<;$CU>6(`V MMW4+AX_1+*U`^?CPE1G*%W<2D,/P_6S\3U7\\<.'2^Z[?Q?^:2D7,X;>%L)8 MML-%+X1P4/SF4(GBEX"",+P*S0C@R=`+Z":!#T5_AF/EH^[[NC$-?19@,,ZV MD3?N>8S"F>`=@TFKUV!>`-@J.GB740.),AA$1Y78RL0R&)8,6.N<"#/=8.,_LW@5BG*KL8N1W+$NCM"S- M@1'R\I39;;G3-[AJSC&ZS3=;2!!H.1_OV7YXI\??"+!N]SAB\K M_DG1Y\K`1]\OK(6'X'!BGDMV2BS#2NA,=$M$`UDPQ=@!2C'0B@5\7"%^B#^E MZ"(,@6L*'5M_G(0V>HY=D'FA8$1A;8JR*G=&RQA%X@45'='<4PU[4JB>]`D) M5_S.N?)VP4/?L+.PA-2."W^^+)'%7V#+<']XN3)>Q-G2:#B=U`ZMA`<2A#*; M@?*S'*9P;PM<+O@6J"*(FOYQ`9!G(I(:A1/PRZ*PF$\\G+%(=?)'D[MC4JVW MO4AI6'SJM4N;0$,/,6X<&M&?XTIG6=R<4LU%M%5QJUV'XD'?YK:!>*'Y)B"_A=TRU4$R&44MA*Q#(":9DH*C&'%&T!FGC`._JZ&[@\4$]R,@R M)U$DQC)0ES5"EK-Q@@WD0217@9\&2R0M70#_P6*/$:3"A0D&1D ME7<6\NU5ZCLB4O?)?2A`'#?N<6H94T1.PN>AUIEK6I,%U;WH'C>P=#"KO%GT MIV+T"!JAF-J,U.*XT,H_L,3@VR@@1]TGHIT&8C@NJ'#7CH@C#G0"M_(L5U[% M9_G2H_SG?%<-89C`"3N?,SRE)]&.F.//`;L>\-EC%G'&J<\N9 MI_%R-W2RD?+HAB,+.JV-9? M(6C"8*%*K40GY)QQ+%3G?#0@T"#XCSW'&]&24,A+A*0&R,T759,$8I M)(*NQ`QP6(""X?F`8S;5[0DMQHOLR=2-[(^IA5886[&=W$R0FY'`3VRCBJ^/ MF6V!U;8J-/'1*U&;M+L%I"'F+*/?$J3TLT_0Y[Q M:\8YR:"I?.R`):Q%M)X!(#J#9#$!2[*+A,)WJAN)_%G=$$S/;JGC\'H MP7LYG+T)#UBD]_$DG^E/UBR/<8CR*QTRR$#?M M,...I]KQPV(>9RI8F(0G&)7`2Q]+9!?QC+6(,WP0"]H&)Q#)7@$8I',9-V5)J0C'UF7Z?%/E"R)9GDO&_$/>C5+8[LVV&)1.V7`1( M3;!(.SJ$>9653G)9^2O=&W*97"CP\A#MOKA&+>.RA-EFN-PP\F-22LJD@)7% MA2"O$=+M!33'%,DE^>'X3T'%B?4$'YBY#@N0+8G%_/S-)BW!W&N0DV+XG$FN M_-BN1TU.W@6YBYM(.H&YB!7_\Y1TR@+FHNXO$_'$"KC^)H,;\X*1CO!_EPIR M2HA+"#"7\XP0C^%B3Q>8/W%LLW"#F6..^2V*P](3<6/G'+67E"QLC*+29G'>[X=W3])NJ2XJ\LI1BL)_0H2V3N MVI9!YLU%VD(B?SK_YKWP:\ML=W0=Q@9&DV+.+<#UHEY5L@NTW'KISO6!7']% M:2+GX`HX](%\8#?`G5XH[Z;_9";&<2XP*$"6Z_//0!@E,A"V(R$ZW')E1P[Y[!>XJC=CTEHQ:7]1IK)J ML@R*EI^\#B-PBX<5S55`TDL(\>Y;_*"H0GJP1/09.R2#_+HSRX#++D8PY"4: M5TJ"Q"]]Z!H4:+^>A$[V;YFET/Z"-`B[Z9WK/>*E@:*(%.9U(RJ@84#U6415 M4P1Y74%T7IBU#HT$R0@5#GR3RN1T\(^7%_FB83*=@R9#(CDZ-XC("\]]Z2X< MY<+)3(QA1$X/^:Z???E7'9[`0^@_3,:^D#3:B'<-S M#U20+TJY<>&9OPN?-9:4)8&(0SS@$88`8U(3+/K&+\@7/?DM&9T'[K*IR#FS MTXUHCD+RF"Y)*=61319D40H&YKN'F3+*6U>88$482QM$JH\"^B=+!)-'_MJ" ML&REY?=7=R#==5H%+CA`@Y,?YMQ3"=U0[0BN&3E M.4GN]T1YV1M1*W-"7')*2NAI,NH^!^\'$^K4/76KO).:_-WNFO? M*9WX7;*[[,KZFFK]7R\%ZVV?Y=XHFA=TQ5V.9`+!C9/`ZRMQ+**%?`0TSXNB M4J4BFS^9V-_*Y?6W1%I_TC!X?1UZ;DY5U%Q;L78M[39I?M+^2>RVVZW-Z;P= M72FU[(HLM=V3%1_6VJK6XU1,X.+7R?-[FEV#P3J9!GVO>Z;,04(/G'I\3UWM!N_*>)'0-NFVJHAK>#KT&3)IKR:4=X'F*YF@ESGX@/> MZRC-JOW+\>VYUJZUH^CZ\%W6;$UP0GM00Y;H^BB>K(Y=$L%3*8M(_%J08J4J MHB*H=,)25&I>:LS%\G0C@EJY+7:9K3M%Z$Y03E!.4$Y0?LP(7<;Y=Q27VG[F MKAI5F;W'"HS/S'#O'2`^YK5NOX[$,Z=?=O#+N'Q5L=JX!JC-Q:SVHHRVBE[T!RZQM]C1 M_D[TB'JNG7FT5K(USW:D.<3N/%KKC?(E0.0(9R6YK#(<75>#GBA(C[U0?*3A M&9^8D&A"QMO08WLOZK,8(RK3$)#W?,L/T/C%GF+8)Q771MBZP M#;HV#%2MU58[O1;'S4\T3<7@,7U4MBU[Y*6^!%E"G=O`@V_HL^U62U/>\VYH MG/3*+7_H#AY27O74?FNDCD:MGZ-^9?#*(/VH+$Z]<5![8;\=_K*F=D>`9[_U M\[ERC0UFXQ:`B`$2RD+T`^9DYZ2;LJL\/AF-*M#GV+E']#5=ASLUO^8@DN,E M$`DDZ[E\U5ZHN8WAO4^(D++M$/8)>F*>85$S.9P)P+#SBNQ]B6.+6)"N]RT> M@3*;X123"*#H^\8W#9>M*MA'7\%><;"=H2=(DQC985"_[!!;GE/G74.,.!&+ M39.3@*0A--FU/NXF(@J'PQD\"B_Z2TF2XDV=GS"+LFD0A#GNYP]>X=QK'T9T M\P3E!.5Y0"FZB!R2;_7TW'[B07\P]"@P\VPO'I!3]=#IN4.0@@O>RO@D`R<9 M.&G:)-*?V8P/HCP&I$^B<:2B<43J5Z)\*:)KH6X?$]H7]_=8$1*<^CTL)1%Y MF0\]_R*%\;7PY!T3SE]Q$L>K.O*2=X?S#"\4&V) M=^A=?Y8K(Z_\\]RTNOFR2-";RC6*5JP;W^\]-W3,-\K_&`9CD\DRG9&*+6R8 M=W2;:_JZO*MK+JBQ0Y;))=!TU8XVW#T"U;)]VJWS5N5JY=-SC5P+Z^E-T5TA M6^]YR/:@Q&;8JYQXMDLTVZ/ST0ZE^_3(C/^]5YK3S]@X;6YV>.XA#ZIWK31A-G70]D;1S3"*VHO'/P0F8-CKO M[+!1T>FY2LX:30A&S1>M&+-=2%?R"IWBP\R%FB?`%M^F#VX+3\\=UG-[LQ,[ M^=E"*QP:*P;DU2N%U4\&_#MYJ+KJH,V/B'U7,T4H;=]0\'S0W<>2:MB.P?EA ME);5MAF=C@K,O_V:3J?ITM.T`Z>IZ8;H\=WW<7I:R&DA^[]]KCJMA5>'XB/' M=UIKZF@_1UN#IW7KO-\ZTM.Z>SYZ7INA]=3NL(8U/=/3^N#5ZFDQI\7LZ?0^ M@&FT7U-S9_VHYC@J:Y4EK9:C,*S(E=65[8LMHY@?6C-I4A[[HA$T( MQM6=CS(W6^>9J-AF/YQQ*#]X*>:@?Q@%;"G;AMJT`K^MK!?@L MZ)G-"1==V?9B^FZ&L^RS]ORV<'-ZK,UL'-NZ\3U[.3N0OGOUK.M8QA;M."7S ML^5_/YMXC"D>6#V[\&_6$XN/V+1SWB]U\2V(ST??^*E./F]HP9WS%;ET1:O[ MJ:1":WYLUO73G!EH4L.[%OQF*@N+V4>4^!$QBG9>REUU],PFU]DTL^U8V46, M^.#:>D`SQ(^0";NEPH1'SX/=#;.M#E#?!:)PC3>E^ODPXPJ]\R,+F/?.*^>U MK3?D=NJ\2C4##//F&$$*&P"<])IY*9#8<2[9<4U7`H_I?N@M%"OJBZD\3EV? M MIRAA2T_LJP@O3\(@]%B6-/S!'?)2;#OLA(]8'FY> M1@UW-K8&`*PNC"GH'8)=Y:WIM1"&O@I,U< MD]GQ[T!@G4_B9`]1#U9.33@5[[%%I*A7\<7&6;-&6UWF0B"D$\ZH=6FI((P9 M>E+=%72Y)$37S_GD`9N7FG8^Z-%C+P?G_8&*V@Q)#C2V%RNH<&J*W4P+87@/ ME?+$`@:P@%D9J`=W`>;%W)WCJ8=JPW*P>>RCJ^"E;^Z_@;,EZAJ,C(&,PQP+ MM,A,=X#!T.@@1'&;=4>,N4X]K]NV&'\M`?K\?))HB7/*7@B1%*V,J;/N$\7\ M;'X;[/=_DMH*\2_F8,`_AR%AUQ_BV_1FP3L1EORHDYCREKU6$HT MUBY$3W:<]GA'$*]"=ES!PVL=!FBR8V"D./L"PU.YDK3FRDW<8%"^4Y MTO`?&?T)*K*@&S&!*M;*:69%+#W$1*=QT1)Y.MK2@@4;^K+3B="1*X=6@&8UPEZ1ZX>%:(5-"`@J+FB7/:--%NB6S1M&KV42 M,-=AE?0GY(!D5H.PVF5F@[#TU M/64T-$S/4T;#,]C":JV:#B:EH::%G7(:"N,O=YZ+]C^0U:>+@H=ND["1Y(;F MLO'[O;UPZE:=IWJ5N^@L44W-Q^J^\#$R.^"53;>@J$+TR(IEM&;98=>I4G"= MTCUCJL(U#>[&[AQO3V+^D`-?8`R=FH?).[C7,/(WH$ML&#E"5 M>SY?B_.&;LXLQ^).T8<#52R:VFD-#\DRVKI3SZ;9([E>/:6-Y>,J8UM"]B-M MX7*8ZSC(TZM9?FJN1!B=U`>IF3:RC%^MZL7U(^NCNF3Y5+Q953,=2/$FCXQ9 M4=O\92D$,M7!+#LG,THC(%Q7IA)TU7Y_&$?$M$Y10"Q&=E6J`P$3<=9-$5V- MY`"02H;MU%%G0'@2R)+)#UMMUYJ9O42;T$D$*`O#5U&$SP5A< M2_BP)N.3CU/+F"J6GTBM<94Q2T9$*0M&S^>IS.&*YE*:G'8^BG&G]-P5U"J< M%[[=$.HZ1X8;]\[3&QH#_)G-0[BA`L0[S[WW]-FSG0>N*6=*F74?Y+!O30S[ M5F*\%8%X;.HT)+PW3E9RVZW64%V:F%>06*J'P=3U2-!XDD*T"'@LG*,XONQ1 MC)[4U)K,OV3>X:;SP&/0F&'`-0\*M]KJ#-7!:$"`Y:CP@!(EN9M/Y!`0?F)> M.&:3S/DFI+-93`N/\T")5DE)3ORC]*Y87OS^FORVW,+2\&;Z(DG3)"2"0N`D M))`.D1?+=1NF%X(NHMQ>D1SZH'L6X_F?$YUV4,6$$CLTR5FA`_7O1>H4?-ZY M]Y-3P7GJKXT.+_P[XB*'KE.J)_=Q4,XRIAMX#\@/?X7`*Z3O2BK5,I)DJ.VFK)MR(QP#&#N*)T:Q?@W MQXJR9GQEPDQT\,&7]2`$B5H`LWASEY+E,$F+_X>[.L^=$MDHMUV^@::.[HNL MH%,SD<-()#E!V11*:5?%H><9G%)O3JDWI]2;4^K-*?6FK)?X)DY4A_M6WDPZ MUB8CI9)QCK[DOK-B;-QAE]R379XHDX`K"14NQP!\?`\S+;B;89$5W'"/4%N]TDI-=5BIKFJ=U=I4EH=V"JH>77+$ M!>HUNGRPG&*1U'=+B^@)TPI<\)QP;#S#8\))[UHIB&JT,5G M_-79&:ZW)#GCU&@B1K[)^,S59I'5I=7H+[7NB**_<&?$!E=X>51LBTW0>''O94WMMD8JU(B/@7+FP[16-C9([ MNG*_=*$H#%OW?>Q=0ON%>4FRO=5J-&Z6HY`&1#SAAS[B0&-P"2RO]T) M;T39X492-W\^0WZM:4X\'DPV9HR"8: MJ;0"2LS09:,P07`"+J.DG'P"P>*U$);P20L_-7<#?L'FLO*R.Y+9(MFU&`(] M@B#70XWFA.IVP'!1@D=F/V#K)">8^C))C*_,9)&(%\M?H_*B3*GGTX3V&SNB MS/0_,2$0D/@3E)EO6H;@03\?:5:5&]Q_!W;X$I:KQVU1?M7AXSS[(D&*S,L? M@9MU8QKZ+`A\>O82E@2"X%BZR&0$-"C]#1BY-8!O>&YX/Z4C3=![AAOJ`K60 M`]D3G"VBT=AX0:DE;D@\3B,P>6*04%F$4'J)\$>^,0EA(3`N]9]@M?=Q*]H/ M[!H3]=!QV+T;8*@?T7>4"_-!=U`$[CP+P^'*Q;W'>#^<5Q=W%S_'HD^-#FD3 MA++'#CX&)AYRB4[2M9^D:SN=[3-FML4>J%<2"8;)X%RC=C1"`*+\4PH M8XH.0)3@-+&PPFG#5,E5V2:UYT'^(7(^+WC*)Z5@^L\VJ:ZNEQ-E*R_X!:0&P9P>:?Z@0:"2J4Y8\7T"TWM M=$J-_*D;J>K(=T9JO[]B?$\E_;2#.191JU73LD/RQ^?+\PZ.04:]8^N2TV_\ MY#JNV."2T^$@PO[/91WEE,J.3ZC$1 MGEC#6L?L/`.]5)=,GW(6ZK'$]Y*S\"75C2)PX[+@'@A-KS\B;=55NZ.AVNNV M(BTU214ZJPJ5YF:-<4)Q#'8Z1K#0%YE0;MDV$FLR%9;WD4@WM%"5<<>C#RS[/FYGIWVG.#A\3`?]E,H/HR+,*`'5XDK:)>21]CL''PQ$, M*2$,FR51`;T0C.3C22S%L0*`;BF M4EF6^('VZ!(_/7=Z;L_1[4YK_92@8YP.U&^K0VVP%^W?W)K45G\OD?OFEA35 M`;5_>5X+ZP_5X:`&_BLG_`TP@I[:J^/HV-NY?1OYH+F7^##EL]U66^V]G-`U(#\:[<>V:+HO4D_M M]THEXNRN-5(=1\%`[?1KT*?E)1I_H1NRK3O?E2]SC+`E+L>;R?K>$@Q/SYV> MV_4]]I`\1"(=Z"19I^<.^KF]69I[\!!M-%2NBV4EE2N==HZM.NI5SBC>-;+9 M:]X1H-SKJOU5#3$/]/@Z5D^,IG9'E4NZ=HEH6QWVC@+1OL]45YAAMW/AR5:/;7;7=&*O'8,FAI"W1Z6!XJ/Y/H3']!:U&%_P^[P-:QF M"Q[2U+88'%R3>!Y`[4DR(83G6L._?8N/M%N7!4N)NJ&CVY2<30_)D57B"='T MD'?H@KLB)F[:"UD.DGA^RG0SJD+!D7J8S>RY$\P!QA($9<)DJOE%WKER8IJA=H$3B()4I.EY$R<*6S^?PD5DNFR7B@A:\MQ^L M<;R(^E894XM-"C*6,9>9>1P[RK&&=YD:?YSYF,ABKD%+C.$3^#Q8)C7:XK4O M-`V/]]K#J:9Q2C96``$JV*]1YO:;(GG?E[/U$)(?Y;$#-F[H&;Q3EZXXX6S, M6YWR#'O>NA#M,)[8[7JVN6%SKA(%'[7WZ,**!3B73/].M\QG6U;3D[VYBI=[ MD&4TO3=*A"UQS+A!=7;K*._8V`-%LHA5,=:GY3NWZH[CAM28C^HU\*>"P:0@ MXK;N47]7DD%3+$6VIWS9.F\-XV(UWH@O>@A;#,]AA["NXJ/N&=,$4D-151>X ML%R;OSYU;1,5(*#`F[PJ'#.N?4"&J#@F*J/(?[4KNHH*R[0+"1C;W MDE&O*RA*U!QEJ$F81P_A1%1]0>@3[[&O[4D%'TTRW_;^_..N\^$=7&[3:K59+8%H`9@,DENG1E1CT.H/!L`(&XKY>#QFT M3KM;B(.$L@$.E:C0;G\S^@%/]23&+W5;2QZ MNO!O)]\ZVA4SUA.DW6GU1C%"94#6A6&KP[=L'<5:O7YU#*FR^I8*J]^&"W0Q MU<)'P\0FYD%P^":SWER`&62B*?3.UN_+V2(3`,+^]CKW=OQ1L=9W8%3I]G^8 M[@'J5VA"E_K^V9G6/NMH',*R3\7`KEPCG$6/W%'CYG?PMW*R\(]_"T!+/[,, M$B*S`1S\WR)(T6?R<#@2&]$.__>LU84_I&&E/I6']'4Q+PE`:YW]._UI?#?^ MXK436,'B$O[NZ?8-<.S3O]BBW*)G^;Z!VP MB6#SMY-B=//I'1Y+/:W3'8U2**V`F<./\V]TT<`>U659YC_,3X$M_%06X#O+ M!F4#NWS/!S27@/,!]#M3+@R#V=2/VE3H(TG8J:]F0=Z%8]LRWMDNF"U+2=[] M-;17JZW6BW_TM4&W/^IJ*7(G/I^%_!EN(3[>5X)/^JPD!U_>OO]T_7_*Y>WG MNR24]*>R@'YW[=`)P&0G0I3'+6'.54'E,S.8 M]8"/?6)!3;3I@B&C%6)4!*T&O$H2JMO6A-%9"2^/H65Q,4.M]%]RS]Q.T)]" M7P#S!PRBF17._)N$7Z@.$^>LB_>%--85<*E]/97,[C.MVV\WLIH0Q%^VHF=^ M76(^&.0XN1C2M@B5Y&$-4!YL@=&'>&1*321JCSK=?A%&>5#;8E3VHM(9=7(: ML21&X8PWA^=W&7R10_M"7C/`M!OT-87^[<;X)Z-\^,HP$'3T50YV.ULILZ.;`2O).K]_M]UHE@=5ES2.)>P4PBSFR%.B2R^VT.OUVIS3H!]VR M451`CK[H-AQ=1LC'GEVQ<1#_JRX%U!T,L\AMAD$SZ)=50X-6I]NN#_U+W9_" MQ1S_SW74L]N_""YUS\-ND'E#J(#FK=$Z8W@T[*3O&*7@UHEJ6;VI=?O][GY1 M+I%=#O: MP"S=_@(0PHD0I\PPC\Q_(A@F3%79C>N[+[D08^L<(YZ;@-X2V5)"L`3384V8 MWNG>K4<#>TU23O+%3;7X$C1;[4(\ET&M#\TE*KQA-'D86HRX_2\S-Z)B/O+- M#3O>I:Y5B&$6X/:8E8O)UXX914;KH%=7:_5[JY'BL&I"Z!M_\QN]FO=^[!7) M\GM)Z14[1*@BU;9%LA8#==A>AD.1>5<6>-E@^E("%`//1C@*HRLK/'VI3WSC MWRCG_FWW\X1:ADT6;1_^_-YU330L9+[C%]>N=M;G]%9OU,W8D4L!5D*LFO-H MV,GM[<98U4>C]BAK:Z>AE$>A&C5ZK=%H4_BU)@!WZ!*:0R"=?5L"?K6;3GO8 M+0W\BDV8YR4B["+E]2USV,0*ZKDT=K2T,*\!6AW#:ED;W4$-Z'WFA=YXF8%_ M6;7Y++66UB]&;QG$FO`K']0==&K`#\C,':+UI6KU.ZUBRA7`VAZIDO3J+Q.& M2DA]$$;`V1Z@Z M<3;&AE(,;B?73\94=^[99SU@MTZQG[DF;WPG8^AN@D)-R%?39/W1L"[$GW"J M&1P$PCQ;GN+QSG+@Y$EYQ.NQ]M,1D:T0:FIMM60?[65E4=N70]FU`H2:6MN. M=VWMRF!;K8!]L![PL^X= M;M8;"VKKH--,Q_=@U&#B\%OJY;'>MU;R8-`R'N(-$*@'\VHW\=ZH'JS1T_-H MV?;VWMIV)B%*?GE#>&4=M.U>NQ0\K.B^\]RZ/#1=N"FG[>0$A'*@JU7K]UL9 M3^%2N'&./>HO'C`.057%<6S."XE2D8^6XWI6L+C!9CO,#\"22'\%;8I@\9$% M4PSYUUO8!.O*F#@[7,%AD*Z:93@8M$:'1+=F?*+M7J;$LI2SL3$?:+KA;X5GM[&I3-M]66#X`#[K>H@Y3JCW(5%\EOUX! M;EDS:=#N9_=J%5PN=R*>YSIQR[-Z9"Q/@F4`*Z)6B57ZF1SD\G@E:OPPJH?. M*]%WB"NT!C+`UX&L"<'J6>.5$:PIRM#K=COM91@5.O+K+PKM=?H9SW!9'!9@ M8_\&T#STKH*ZOW-YUSB_OL@"(*<5XE8"=OU(EZ5HKSVL"6G7N?_*O-DR*ZE: MM601J0;S2`3%H#;4F MD2Y(#:Z'V@,Z<=E=%NRD7YFB@E<)[K5^O(M[5"J1; M@TRNTA98Q[>Z>AJN]3*1W12(LM"KW7L[_4Y_>]BU1U";QZMREN!&J$7<5#/+ M:+G;:0&DS5"IZ#?)]E98CPZSKS2-(';B&4;1`IG322J50JBTA!JNGR MV3IKU`*[6_GR$.:%8]*_;(IA[.X<&?4S'KY=H7X`!&M"BD[T M;%I:CY#"63BUG$N==H%!6QVAYE:W&[9X#N0XX,4GHU#\6R(47(^KL)WIJ[D: M9F7\*GH$,Q&Z39"[TQ?D]\8NK_E<\WI\#J.,!VTUS,KXU5,?4`6YK^Z%\5=H M85)'S6DY_?ZH6XA>$?Y%IC=>+.UAW,?L%0Z'R6]:I4 M)F(V/E$>?BUX5ZP*'0SJ0=IS#<9,RB/"DG%T3-U.>`GY;T!&#Y0#O`0J&./1 MA8FV",&_H>%T-`,@&NU15Z.[#",UB?&^B%/M\M/+I,7LB31XF_RH!WB;7%#_ M&]MF9*CZV.JO7I4W&HZ6LT-)1.I=2<44M58FQZ&.=10+?!T96*->'MVET&K` MJW0CPE:_4Q&OS\QG.`<.'KIB#\QVZ;$ZS4(X5]+(K019%;MJJJ.;:4FQ&6J! M%QK(GJ`A6!#8-$X4TU)G<]WR:+H/AC_]VLZ`[BB+[`889+'G@4,9-TS&Z%0+8>GV\E<-$K#EYTZZB)%M]-;CDD" MV.8850NO9&VP324]:EYQ;!8E:@\.YF26-8'RYLGW9^J9AC2!5 ML;]"_N!N9I.WFQE0,!ZE1C3+IA2W>MWF:%6V.][ZMG"-(+7M!N9'QS2"9D4I MR%N&S1"Q1E67'7!4"F'>(?&*+A$\9,8])4FGQ_43\PS+7]L69+MNCMT"9M@( MNU*KH[:(ZQ=7CRMJ8QSJ7$+E_2G4ML>PK"TU$FQ?@<1ON4[^"#IB:HVU=0H4 M?`[4QNC4,QZK##)_,.M^"DKOX@$,VGOV*<3MP7`2->%9/3*X%-&*E4QGU,\< MC1LB4M\JUM-ZB9YLMX?]QI>0>ZMBOZREVY"YR6^$1ETKJ+P%6J=3:@N6HO^W MUT]C#XN%_Q]02P,$%`````@`"X&B/G;\G(T/#0``;I0``!4`'`!C9VYX+3(P M,3$P-#`S7V-A;"YX;6Q55`D``S4/OTTU#[]-=7@+``$$)0X```0Y`0``Y5UM M;^.X$?Y>H/]!]7WH'7".XR3[DF#30UX7`9)-D&3;^U8PTMAF3R9=2DKL_OH. M*B;G%87&QSJ&?X#((9$2Q3LZ.G`^#X6!O=SAT]HX.#H\^?'1.;N*"/F5_/)$`'%2&!<>]21C. MC@:#EY>7G?F3\'>X&*/@[OX@+=B+2Q[-`YHI_;*?EAT.?K^Y?G`G,"5]RJ3Z M[DI*5J.3&QX>'@[4KU@TH$>!DK_F+@E5\];B1HP`/W^ZLE<)>/&/7]3HCP>32YR\-FV--;&,XYTD'.V'>&9_."%M`N/]F`:FX2TV3O!GVE@YJ(J1#?OER"PM4/Z#%I,Q.E\7R*V.1GTF7K`/!,"5D6W.U+=H2XLG$"( MUN8W'+9RLML;P]"?RC:><-_#,$MZB'#1$&B3NMX6>#*&X;?``M6#$"1LJ$%9 MI5M0A;M_G&+`INK'R@U'[#*Y+3A2#&3'%,/PDR``-4A\Y=Q[H09&4"6[N3,A M0N!PO[A]\NG8-/S4"FT^'',5;V`69#32Y8IOQV;N818)=X(6@`/66)"IH=N!JXO$SLNL@V8 MH`W)G#,^19N($[DH&&`V/29D)O.YPP'XX?(;F'23KW4_+UO[]!&+NB M:QXL%?/)$_CJV?G?!VWAC$%@7'$QE\X*3H'!B(8:Q*4EE]C7S.-$9-4@PDVK MQ#\SME',EY,2@T`F%;*V/G(Y3>5'@D^U;9@\C]?`Y0)'#[2NG/J`#UG/`AO1\JR<.Q,M7C@OJ=A MJ*JPC=ZL"F\]1_:D&FMZU#/3,AWU!J5A)T-)%[Q:C#W5KI2058'.\+&"W"$O M=@\!8(-,4,-S],<^G\DH/YEAT+!34][F"+D&>D):%R90'L#'BL=?@:'2/NIS MXDTIHT$HU$)>.7NF@C;3:*I#O4^TAU`TS5!$;A@)U.P!PM"'9(_$U71&J)`? MUA>+==VR404V$]Q4EY3HZI[;&K>77"`,=A8)`I_1ZA1T M.`&Q#CA6H7Q&Z1_&>06C;>\DIS;/II;0-ZK7$!.9)U$N"W[ MO:;DB?HTQ$IDYB3W`F2VN&@LN%ZDO6C;!'\EXO?N=:;MOPRI-262[O&QLGNT MQLF)ZT93V:3@J7ZNV3$EW<4WP+Q<'U@UKJ&]N=1:_AKKDI#[V4YR[R'$T`V\ M"R(8^NU@3;US&%%7NU!G(F0QA2;P[>Z2:'13SI2F:E^Z=FHO7\1B1HI@C2*& MUMI_S>G'R9"NE^@*=6:8TH&WFQ/LQ2(";RVZ+:>FHJP-#.6`KPT]9:CM=E<) M<*->4U'6?FHJ>LV!M=3(UZR".[*0[VA6\J(M:#/)O!B)-@1K(-=R*VO"X0;@S<9H.U9N=0-:>5^H+&T?9[60 ME[MN['1-Z4D0"_WXG/W9SN;/8K0[/)*G@,CWV7.'@81G1(@%9>/2B6(S.3L) M,@1O><;_3*@O9R@NN9"[]1\`(W(UL7$.3^'J4\4HW[0&.]ELK$;"Z[ZEO";S M3_?@`IHFZE4Y/%47MY2Q2LSI%C`[Z;FD##6^IL]R2CU[PH5^Q*H3L"RXKH.; M#F<=V*&7SO4NT#%\9RYFRH0RC(GN>$#5SJ;*69I&TNUY"\^C,0%W&*1?L3,R MHR'QUY9&=3[#0,CB=5\3^,U\?%?658ULL4.O&J6)2O*BH8S)\!.MFIJH%[&! MU9K$K!R\$7GOL\VQY'C*I+YTN^-!Y79'_.#):8/\R3FR/D=5:,7).?J$X`ZP MD\B%#`#O?(R"W3@]=HV4R\O9<" M7\%EVC^;J6AW9B]#:D2LWL/!+G^Z^![(D`[C.\)<3')/W)`^*V>EX;J)<">9 M;J*@W0LI:*L0!!@,)*=-R0WXZLS"PH&`9M1O6%^;YRDUM/=EK]],8[O=`+:' M"^"I]S*N@B"2;Q\DAUH&WW%P%MA3L-M@OB0W3E<6[2&FE0F8'+]DV&"]/?'C-8*P5_C,-QEH%[0ZZ MS!,:,^HWK,^V;EZA=/.4L,H\JK:#M^T(7G52>'<(S&E@=W]-!Y7;T?*JD>H% MO#H!VP@SR9)K5#([+*K=(PCBG%Q&]14'?)44M(TR@SY6IHK)&3ZM;G@SB/O. M:>#&9Z&`5[PM(K?VLT%]MM%N$`)OJ/%;[#\MV:^]9J"GT>*)%'QI:2G;:*EQ MH*5Z=.C(Q'1MW/QVD%H)VU@T\*FU.J7=Q]+5J'R2M:9TLDU'NZF[7JB#7)JH M97`/0*MQS3G,!+A4-9"V"Z[_W$&.L@HL#YVS,W8YF7(1TO_%>>:P&JH3.:J'`IBB]BO1,PI=$TJ)Y;?6U%723]E:HN MC>'S3LV]6^^SI:[F:N6DWF1KG=Q8EPJL_TF8YUQ@8!TNG+>],,_P?N4L:HS" M)5ADQN?RUF.Y.S"N2.[[6ZO*6=7E%"YKWIH2)9&OC,MFN/+[GN M.0^GT`52N7XBZ.0NBMX>?ZO+H/.@/A0X*UP<_39GT.:N5,[B&NX-S0^D=7[. MU/7+&XPJ#>Z&SBFR7ZG(Z@L=-EUTGGMS2ZF M;:Q]>YONBTI7G`9;6;K=PZTTT,K/O$>VU:TK9JM;AL%^BD/^AXPH`K0JI+KY.).>P\R MZ%.UE)V9\O:/;'?[@WRY`;QS=2M4C%#!6G]=X6(.PJ4!Z.YY?$4=[_4B+#Z\ MM%>L\K_=PL27%.PK24=G]MN<_DXM65AC+&B=D[K4V'J+5M^^XDC M6M`]S"+A3M",[@0?"S(MFEYQSE4*.BM)9RFZ=8@PCN]P*IW(WAL6I@(3H>($ M]I>!%)4.$#_\'U!+`P04````"``+@:(^$KX0:T`&``"?4```%0`<`&-G;G@M M,C`Q,3`T,#-?9&5F+GAM;%54"0`#-0^_334/OTUU>`L``00E#@``!#D!``#M M6U%OVS80?A^P_\"Y#TL>9%EQNR%>O<*U4\Q`NA1.-O1MH"7:YD*1+DDESK\? M24FV94N.[-B5E`D%TD@Z'K_OR#L>RIM-N M(Q`6%"[&C0^___C#^Y\LZ^O'T37PF!OXB$K@<@0E\L#X"8Q&8,`H182@)W`' MIU/$8ZW`:37U/Z?=_@WTV?R)X^E,@K/^>:*5945]?(1"Z53M3&<732?\0C"] M[^@?8_4=*-14=!9C3CS9;O.D`\M3(6$U$51JT2+=>UM.T82Z]?/>X@OMN0C0,[EY:5MOBI1 M@3O"`+MF+I1FA)[M`61*Z"MMI:R9M;J>:#GAHWD]L9Y&C&B*2&-#5WKZ"%W\Q+(&/G8%?20OS.\9DH%=X,QLCSL:\,QV@!1 M1^LP6"`)IAB'5W!V36F"`R5GPH@V4KF MW"Q!,1]OV4")WRS$IW?=S`%O6&I5;<_[/$?0?'JRE"X!@1DY2D"MGE@!P: M5MN44?4H>@LLGF.0WB9):#7K>CQ)34WQN(-HMA\8P$,=$\[\;"M'';/<+!A7 M$TYEEDOOLU.<:.67`Q-'P&<31P2H'>]US>+O36@#TR!:^E.)9,@62R#,##]' MRVHJ[J1(L7"5]7Q&;R5S[W=B3I$K%GC/\TQD@>0+Q-Z0]N$<2TAVDGBF3;&$ M1DBJZ8N\*\BIVLR+G4RRA`L>$]<-_(#HB'JC-D<\)2[O'I_\[0OWFKV(Y29R MW*1A>PNU,V/8M8:L)Q`9<71U&Y(':/62 M4:E\X8J8IMV&0%/]2TX_'%(5H["YZP$3QL'JX*\#0`2LLPV_=M*JSOCO#UVE M4XF1S(2^+5CX;B3.!\U<$4,A@M57]#$B#S M[6:N/5=<+=1ZC$4FO0/TE))X.#9'8+Y34=%G./\&0NHP(.Y8QL[`P-<7X":L MJEAG[M5'2'F>P!+=(OZ`7112'2$=JHT6,]Z9QT"G[K;\9KV#BZO)!+GRDTH` M#-F/FV1?8+UX[Q,3HLIRD5(82GM!]PCJC[=,>A"D>NV5=1SSP1$YU. M9-CC=U]XYKE),0:<_R1\U:+@XZ6\N]_M_+\TQZ_Y*&1N`4IS_+K'4.R7ZY?F M?/9%#'?F]*4YKLU'\?39>&20=Z_((+D2[(CW+Q7AG9UB1T1^K0B1C:0R0G]9 M$?2G3`KC=;)5<5LH( M3U:9$_^MP$Y?/')ISD&7WM>EJ;7?^.N;30]U3N.AX"S1[WE)/+:"]^%UR7VU M2^YK_ZM7S+KROBZ6KHNEZV+IHO$?O\ZU>$[_\SK7.KVH=GJ_=7!4E[N^VG+7 MVE,7J+UX\EIO5 M&%6X)ZI7O/KPJ[XN,FX9O=<_='&.>O,?4$L#!!0````(``N!HCYYZS_XDB@` M`&KR`0`5`!P`8V=N>"TR,#$Q,#0P,U]L86(N>&UL550)``,U#[]--0^_375X M"P`!!"4.```$.0$``-5=ZV_C1I+_?L#]#WUS"V0&D,=V)KF]#))=^)DUUC/V MV;/*C(`\)>8/R(DBB($X3_,.;)'WSYS_] M^[]]_Q]'1U>O!4XB'*&_GS_0___GAZ="2>]XD"6Q#:9II\ M1-\>GQY_?7)ZBK[^^.W)QY-OT-DG3AA+!%2V)/_AS7-1K#\>'W_Y\N7]ZSR+ MWZ?9DC*>?#B6A&\XY-N)"2@KXZTB2'<%71Z=?'WTX??^:1V]H'R#T M?9;&^`$O$`/PL=BNZ:O+R6H=`W#VW7.&%_THXBP[!O[C!"_A'<(3_ON(/H0_ MX3_%UV\0$/WT<%.VPEK8Y,=4^. M<5R4WT!G?'=T;@LT3 M=.Y0*-7@5OPHVX["2B7<4\J]E;.`T>M6H:'#96MKKB!M*Z13N]H?M6P!B280 M;P/LC;.C&O\,*82*"=]0HXLI5]Q@6?MV_3/%=848O&CY7T`I56H$7H3%W:D-KJ0']'G`"] M!9)WZ*PH,C+?%+#[0T6*[JE2)(43'2_H1A*K3-,&.6$$;K#IA@W/V*CESE,7 M/>=EQ_,4O%Z]KG&2XW.)3@FSL>(VK'.YX^F&VU$,,`)46" M%KT5U._&-['!N*E"(LQI)Z'68'S75&/H1K(@R8;.IM6^\1POT@R7(N+\$TG2 MC!3;FX2.B3@OSI*HV$[I+R^4A&U'M:8R$@*?YC=J)S=-VDOO M.AXFQNI.A0F+%0B\:%1!J)^WS!D(Q%M&O&E4:WN&JE$,T[^N7HLL2#.ZE@VR M+;HI\(I^>;%9;6+:X`MM:+'`(3_5N7BFB.CRER3H+`S3#3Q^B>XS.E.2=0R- M?:9:25'1?HSA)RFWCRE^$J]+O`PRM?'WKGC&&7U9*>^,9,GQBHE$,62:F/R, MQC4@A_CV$%(:2E[2.?,;(:)T]8^P8TD.ZKQ M(VA`S*XS.6S39GS,7(>1,I12QI3!]W33'"`TAU2]E)XF%C7HF"J;@/M1X*>!+G+X^8K61_I%OK+(CI@O`L6I&$P(TFK([U"R9;9C_Z M/4PTJ?*[R>1:MZQE::N;8)RA)6>=H2")4-#@E@N6SBCJU+[W%TFP,HF:S/+T MRK-Q/>`<4X5]IL)=XA<L39"PEQ_IC&D<'O MR8;1CYW8BR2-9;@LKBW&2H:NJU1>P`E:1K4LV;BY\E*9Q5Z`&1LS$,F(@',Z M7EU<.@E.:Q$5D4_M;T-M:KH*H]N#G`ZR[IJ"_>1!;S6@I(Y*DDEH8I^=#1ZG MIS<^VX_+TQF/>U2&>46C<)*C\?!1>#H*;Z?E$U%M@SY[5F*%*MQG:;0)W=RD M6>BJE8).0"01CA]KYF8L2;7>C-?XX:X^. M42)!.D/@^C69U6U+"CLUGHCZ&M1VM(/R+BRS!DSHM-B0C&JMR28DYB*@MGI0)&&OS[3317.W8_NC=4 M/*E_N\KE>O`=($];'6]OSLYO;F^>;JX>T=GG2_3XE[.'J[_/3Q^A:[^ MYZ>;IW^,.EKO(TO%R@^I:LQ?24_DWXV-[6A;4[6IH;8T[@+<`GW_&6[5+VLZ/=>%\$#9R"IC?IV$\STYE8!@V_CSVJ_W'MI8CH3@WDJ&&'PM]>8_33%B;JO<4;2Z"J)[,VT1XHKEB>@W'*\W23! M)B)T%^+&"Y>#IINDK-@+]CE>DB2I(1\_OF3`R+8B5>[(0V5QO?BUDJ%[Q\R9$!9<([L>[P-9/JM5FK"I^&]!O%'YY7?)?/GY],.M''WT.)VI2`^P[A$UD/!C@!EB M5#-TD^<;1ZGJC$Y)MHASCO@/[T].OD;K($,O0'^$SC;%GLV],/[/R#?CSYKV\%!6098+EQX1?ZX62&Z+=K'$(` M2^Q[<0>"$Q[]?Y9$/+O`$B?DX+C/[H>\ZH'6SR*&:3(YZ.P?NQND*$G@-U`_81KZ.Z MF#N*Q"GJ!^GC'AH.0ELCGB$)?3*G@UU1K/5\.OIMUFO_^JP\_PF[VNQ9F2V5 MV/\A54:78;4D2'H%UM![.WC2"U`[8K)#[EJK=8A[#E2`MI9`:F2]W@5L,[_8 MI/3<>J#6T'O5<_.P;8U\)#VW&AFEZGB)&]\%Z#2'81U+H?:X^J,$*TYI1CZ_1`E()R,MJ?"62_@U:P'[V MH&=*_?*=$P_N1SD2R)JKG:T5M!X3KJJ`-_*LFA"[54@5SOZDI![T8*KH MT5/P*JP$%\:ATL3D1QGM1)$J.DP&UXIBQ-ZIKB88_)U:[0X92GN4(RTN)C3< MWF>09KO8WE/@D)D>'")9NCIU/*V>Q8\EV(@A[6`(?M=68,#=$V_+R&=H#0PB M0Z+D83YPHUK$SO`9`T-_5:'W'YQ[FR;+)YRMS(5>>BD]W;FI09>7;F:TKC6] M'V7G+HM2'164C([R)=VX5VX#<=ZH<7HY3[#SC%#0^CQM,/A#6"$>Y]S+W@N" M;__&=8"PQ2C7(Y-S>V@(8*._D]!;K;YZU5/EX5G8T%)_2FI6SETT,EPFKT?@ MZGGRS%2"L)>^,]D!?.,JXF"!0#FMF?X9S\EE"(Z!?%,VMO M3;L$BBM#\V1%_\_8UVDH"M>P7P)49&2Y%$GE7\I<\[+9\#G(EK358!F0)"_* MX`_V&(HP33#:TB]EZTF:K>AX6A71"KH!ARV2US$=:90R89!-EE9O!3\[W3YQ8HIV^!/A7'6[2F[YG^ M"@X/<8Z_T)*Z[;U'S?4)"C+>E2'P%BET089%K\-+2).X3['Z&(#>QT&?>N*?YBF?!=[.$=\T'!Y@>YK0!VS5YWE- M$E]%9;LPJZJO:GRNE;>%JUN/D_\\ME^P):SM%,[4+H(<:J?`?W#6]Q+$+"ZE MN!"SGS;\SX[74WS3$,'***==)'*F1[8B=,XW*`,/=8(/-5:ZABF0Y.:QAGYR M:.PM60@?<,4*@F%8@"\0?[BO-!M.))N7:3G?1_&W'W])2>11%+5AO$]P&);I(+?G1" M]R57BP7=VD.E>2;I>9#C"+*PX"3O.]TY>.N>3N-H#@]!]:?X/B$C+R2B"]R\-C#"LDIU/*8D]W0V9H!?'HQ9 MX/;ALMV3%4M=L)TND=E?,5.<2A=E#JU[-FO35C),U>P2\_\5;W*\QWMT+!^Q M>QN^ZA[ZU=EH.F)']ONJ]Z6XFR'Q>"2?CVH`V)ZP!@%5&/PFQ?/8E[*_0ME? M1:U_@EK_5`GUX+\_?/CZCU.(;3&D#^SO!H,WU"$:GM;@-KQ+3,/6[GWA>FE[ MD#[HV?35QAI^&36N'Y<3L0;E"IV.2UBM.`LLUJ[C](LIB%?/XKU(CE*,GN(X M1OS.=-``6%L,A_X1<>>,LA7FWL#.:EE+T]&O_G/G0Z%[&6$X9T4DH224G@F"*YFH%2=$T5^6D;GBH78JV#1 M$,J8WQS[3"<3KKZCKLH.)IIL`$$+((IR,/)LB>#^1!'=9RF4G:2L7<"7;"U'#O;7DAN%)3L MX^Z:#B(6S)=,--D,FF_16VB)3IGO4-D8JEJ;SEK6O@?VMM/IV^?N=CG:&G:0 M,`?05!_KU[UE9*O3=5W&C92Q;\SQO7AE5Z)/P>LYOQ!57RW:6^6>;7I:WAZB M(\KU[J%Z8/P4"R'&40YXPC(\L.?QY:!\(NQW MA,/:!AZ*RJ?R`J4*CPB6)0(\].3#N>L>$H_W,9&-W9_U'@QK?FBB'QL^-I`2 MQ/?,IYCH>9*$`VP6M0U-:C%J(;)A43I`5D_K-[V,ILTBD=Q3VRP.$\NP!"\; M^SUM%GMZ8&\[G;Y][FZ7/E>7P58Z.(;_VI`,*W,RJ9:*`QKPM.X;+&*YB-M9 M-G"CT&,/P7%)H,:Y5!Q*XXQ\]K*[Q;F7&([M>1_"S90Z+Z- MU8[2CK)=LA=/OPF"=F9(MB0*Q)5M@9IK4HB-O:?976C!142>DIPVQ(33Y''S M/5-:6*:692*SH<[6!N`?;\8S6$_/''P*4[MUVV"X_)'PU;@'Y2_\D@54MP&[S.;$H!4),=GA01U;E< M[V:,J;P/*,M.B9X5ZGV31'B5D`4)N>,4++)RN(O0J;@%DPR'.BH`D*"(9W1ZD60[%&^@C,'QB/BRK=9QN,23PE"4=T@RB M75U>5G9"%/P@O%LF.%^@SP74295BD["E2E*]Q""*@F.Y^8I`!+O2A8L5[ M]%3#&,1YV@#*JXFL@XP=JD+!C;*IG!0;]H#=1K6#UF[(R$M0L`0H=&#>\-5) M$OT%1TOCU88MLZ^*#D-$JXH[["*3L]V0M1#=V@F2$=4XIW,#IQ.L<3IP2?(P M3F$-K)J<#]/D])34MAML5'>H_*Z/AO>4VT[;1RYM,H)$;((3+=:O[*HVM>N> M/9;,<)#?3AV?1#5G'=V^<0"SAP7T8-'*=;0UY[C+Z8&P>CU69GWE)Y*H[BWF M?9,YDIR'W'D:(6MWH$.XIVA(ZAVI/>O$3,FT![*V)=_;U;$DG>A082-=&2(A MB[NL`MB;0K0I1F]/WU5I7^G6\9D2S]#;K]\ANB4$Q@BO4[KQXX4.T3Q(?LW9 MQI3'T].M)>Q+Z<:0[0MYM[W]\`[ESVE6L'+8,_1,EL_QEFZ6*8:H[O[**S?" MIGI.MYU08#`BE)`:+'WM!9G'S)GEUR3]DI0E(2'J50J5@Z=+P`H.DHR*)?SI M6:OTN[+\(6`D2[ZEIW]E)/^5M2.21M&M\PL[M9[C,-CDN/4;2:@8%#++-$6W MSX\@&FI7)&_T:O`2$/H>8WQ$-]!'X/C>((4D:_(\`,^+\@51[#D.I<]\@@FO M[!D'>0Z;\PBJ0=*9@<4]TW?PC./HJ$B/2L$K9K;)IY+4FGL.7J#V):&+,/K6 M5I5O_I+V.Y4&N@TJ0V88HU6:%,]\V991-2"L0D>-A790S#+\`XNL_?@>]99J MK]YO3Z_4\#']4CVM@;$L-@GX:@XUG+TE/"=A5D6Y;9H#;: M5(T@V6S857@_VQBY[%LY>#Q;')$/RN3<:`>W(E,H?!W![R MG.+`E>1((0]L+E)FGG0=-^CT<6@C_NK.#1>U7HYN=QF=J>-@H?JJD)&B.F%K M-&&KM&.,#P>0M,;B?:X!+WNH$<7OXH3OH-&9SL#E:\:Q$J::=`9)X7`D-\'N M<A$])(!@A@DUPCEL&FJ14W MO`^RNXQ58(F8M^X]SEC4@V:+8.3T7H_:)%1/;6I;:<98'INET-<@7@<9/\0> MU8SV0BZ*;E-&.,SFK,)]G#+SZ*'I&`U/Z'FV*9[3C/QF7["]SN'=2%1"*`NW MJ]&/:!0]J*T*<@J$"/SI3()UA.G&&>MR/F'N!"*R<%?J2S/@DQ MKTP$D?'+A+7"+%VUU'/^V`EDHG#8G4,JDQ^R'YVO0=WW7^<6!`Q3!+&&]4S4 MPA5[D+WYYS2.<)9?L=MY M^_J2.E[OA2;-@O54G+27R-U-IJ4(VAJ492-E!GK1S%>(-R2.TGO*H?K-,+.K M]&:!)W,J6ELY?<*K.E]H]DYF6C4P M\/A:XED(4JW/!DC@<%6AA]Q=$C36`$R0:HW.56S5BW_JC1$=?H6=@<, ME/@9D^4S5B$9$*"2Y[" M>0]NV$N:HZ8T?@(8=I(`XM,#`3[9@"&S=%K\I9`\WX`G/-VDI9LB+^@'\$HM M(PE$$4CF%QX&<;@1,?&TA7F0DY!Q1B3>P`N_NG]TZ16>I`G_*\*D/5'0K_YY ME11T__6`EP3V7TGQ.5BU3T359.,.#":X908\"ZS.)@(%P$Z^.D:&*CH$A-[U MX((:4A;$D'[B]:]XJU2$#ITO35``;JJ"`:UC7>A"5"B#($2,$E%2C^IP*4;5 M)_JD'BUH_CS^R^^#5P;S:[`Y>]4M0)V8=/$S@M\G\%KYT?=5$EW2#8SF_;;H M_+WH7L#M-ZY%Z_S5MR$J=4#<.U!*!*0>U>&,XHD`TW4<+'O4H/7[^*^_%V!Y MH*!#Y^[0H`6I@_<)"IS5U-.OXK-\$N]_R6F-UM M^=5`.SM^D4V+TR(@GH+Y\W7'SSB._PKQS8\XR-,$1U#=MW-(9$'O:PUH$*"Y M%K1$[WA-J(:L6!L"PQ&/0I] MNU0!5FTRQ514,B#.X5UQF/Y>T`EQF6;J@X<6E2\UZ07;U`XM4L=*T8:GT`5& MAB2==PVXW\QC$E[':=#V;E+0^'K[/4";[UZ#TO&;;T)3O'=.A!B5][?><56^ MJX[4U=.&ELG;Y&$A2FL*&2"'ZXE$#UXUG?2YCMJT0&E]NS[A9'X=M\K\7"_0KAJIWLE"/I_):J:408>S^J@$Z2C M'382N%<6!62E[LRD%VC%@GX!)M_:U!+D,H7,8`HM4M!ZJBBF`UY.03:(W62_>HJ`H,C+?%(&H'P"1`))SB1-6R#M-4,#K$&T/62>E)APU^&@3%B9+ MK,C\6F(;;I\E2AIOEM@$H+=$2>LE<,<>L_C9NRT:8%:VN.:$_;:X3%.Z-\C3 M.!K7'`^XG&M%+'UF\4=WB\ZUG&&M-[P9/PO!7<65J\1]Y/277:+EZ3SI ML;V%..O6_13:-,.91J-(KA[RA#5I.!+98SF0B;+IC_<#K[^IMO6$PZ?/SP+82NP[Z2 M?44_G,R`?HUA=8QCEWZB-O9S31)2X%L*);JA^XID"37ZSO(<%SGM#(4%F9C\ MV)"=*-**ALG@6A6-V+OU`205"AC9#"78C16IAH#!F#G#$>-`-0'.A`"?NP*, M;`VW))B3&%R^T^RG1%1T?`I>[Z%@)I3#_$S54#NY#&K!CYWL(*0TFCVD=H;+R=E"#+8R ME&6&SEJ'_=RCU+,QJ/)+THD3DV5R(K_:7OJ#LH%`U!N7;9$@K*ID:U\';B9%=Q,>RMKO)D5%% M[CAW@M%%. MC&A-EYJA*.\W@9*0#YB.MYNPV&20\`<71XB:A7=N(^,S@:(P4+U'/Y7#8:5$(36\ M9?=^PT/RW"KCXS7]IB^WF9+27P)=!>AV"ET#8FC&CS! MKYUR-&A]JT246:4$U*(E(NNU83JWAAO,!9AB.Q:J+#X07]BQ0& MQTLSFZ=H8DMQ2CT:*(?;.U!$L90`!3+E6K(EW156*$UW!S/>Z&8Q\I M'FI2"*Z]/"4544G2("DVGCGL)EFDV8H?]?:?]`S@\Q"W-$2@,I#)AFGB^8X/8MO9NS5`N:>XKW@5:,7$H2+VE81$![U* M1&*#V=EXJ@396Y@;<4H$I.C*845N8W'>(:@'E!.?R%6Y.F"@NM*3C@-\O4?Y M,DS%O,3\_X&WZ(=XX+0NV`_7A::[]\/WW>AWTP?IK"'7UMIXEL:]=>7NXF.@ M&;7#0-1-0G^-R6]TO(HAO!K\&+I]50MD8J[ET$-T/&(A#M]^^-T-:L.]?@QM M_5Z&H@$>/H,DGIY9V'CS#-;]2?CU#)5YYV%Q"CX\[!X)#K(C')UO?\HANN2& MO1`(.N347NAW&QS=K47.`=7MS)YM>G*6/41'E.ZTA^P!9P:PK\B] M%X^R033?HK<_\6*R[U#9+*K:Y9?!LF54->WAIM5%3_#`17;8QDNM%RF*2+X6 MT2&>#?^F''6%VS)MD8O4*5U@Q^+';&W$D%8Y!+\SHS,`[D8>2O+*7[S&X6,) MO;L$_0[Z/@Z@6/FQZ)+=SO+E//-9J1U#Y%>O.`M)WG%9W*,=C\=6NPC<.-': M1U*WAUT#1>L_!^.-(-Z*N'*;24>F^E%9CLK&O!V4[2DQL`=4;6")+CV#F(2; M)*(K6?XYY0>#:\J9BXZ8IN'R5$D'L%QM0Y,R70N1#;8[0-:QC5=#Q2592>;CO5(,M;S>[)./>9:J>KU!X\7;G MG'3DH`W?@'>]5+6&S+9O$%H-6S:\6L?I%N,<@4:A`C,C@\2I-<'R0V9!K9Q] M*025S[^6TH=/@19TY4702S:RWX`&@R9E/XM7]^FTO@=X3UX,0["6P6FK(,(H MXE,Y3W8JJ[VNN2<<-4KFR?ZQ3WV.4ZP MNKZ"DL1"FW9M8RC%X52,9HW2WJT![X.?9% MFA=Y!5Z.VZ;@Q+U;]55QZ""=4=4G.F@O.-N<[R]V=RU21O[1";O>)A*-(M:J MV*P*'Z]R5>`[6O#P'<)=V1AYHSM\C\=X"=`?Y*K+/OS8BM/3R&PO5#D\#Y?& MW5&9%?QNG1+&A4JV247?[B52S:'9=YE=4=-1!N8:%BYJWH MZWH]D&X57D%>9;9W[=]OL93?508(Y_XBBD8&O`0Q MV`K;*W^E;J M2Q)ONL?E1NII*'8+O$ZU!:EWY6[@L%)OP3$5!=<+H``[NJ-8T\_])KF3WCXB M!):=,PNOZ)I%EU#F4 M4-6Y9NE_)M+SLY50+%)TDX->?+>3[Y\ET8]I>A<:R+!;9B\W!M-T"<\@[/ M@F?<"SUK0+K"#F>5YDAF[V'`K@0[Y&WU!?.(7N)$D_A01^A!Z;602S7OI1I7 ML340>I)+UVB]:^[.R`^IFNR$]0&OJ73/=%*YS])E%JQT.FKB\.6\9!2BZS77.@X962:CZ&I7(@/]%%3=Y/.B MUG7?;D:'E6=*!FLG@V.+Y=<8EGF$=-0^[-0(OC)1)>G(UFG`87//Y'_^.8`0 MOCWDRMU+TJEB9W_//+013UG5=Q*U?NPZK(713V-W@=?1T7*K?9;T5"FZX=F#ZNB> MX-FBNWE,ECQ^?3HU$)J";>UG!!O&*2B>3B2UVO5Q>58Z-:2N7S]G1*7J36Q, MWUFP/EOR'H"PSG!(^I:0_22^0@NZ,)MQ!-7O'H(&V@_OB1"H2/R%`@R""3ZW M=".[QEFQG;&HT&+&UAW@*+3NJZDV=H':%?@!_L;`WBW:JRM%)YB8/!6FM1*E MKO!ZCM%-P`9.M[)KC0G=+;J+>5^6LK\TU'9(NP*\;W,)PPRS,X"&="Q#T29A M-X7W&5Z1S2JO$K`HS6C'QCR9UUZB-\QNIY;&-\<]8'856S:&V@9;ML?VXK)% M='.H]'R#X\S=R-\R[+7@/(Y*\>D/OG(2?L:%92ZR'M$@W>C`'&P^//_WEC$$ M&3=<+/&FF.N/6ZE4K^SJ-<0YI(8409C7=+#J#^V[)DF0A"8)>7LLZE2TR!,/ MU*.BZJW.4-FNZQ>KS:%WZ'YHIA)M)#7!(CG*N"_:&-UI&^#E^B9!)<#/(FS@ MC$<-?-ZLYCB[6_#<,'>;(J=+G`A>BUHDV<21:$,DEG$M48$S]7AR2+'L`RKH M-%$UW8FN^\KDPHC:MP7LK_([8_.$AUJ_`Z";JOR*S[?T"?1O^A?]`*,C M_>/_`5!+`P04````"``+@:(^3X)]1*87``"*7`$`%0`<`&-G;G@M,C`Q,3`T M,#-?<')E+GAM;%54"0`#-0^_334/OTUU>`L``00E#@``!#D!``#M75MOY+J1 M?E\@_T'K/&P6B"]MSQUG-K#'XUDC,V/#]N0D3P>TQ&YSHZ8<2K+=^?5;I"XM MJ4F*LM0FI3,(#C+NKF)7U5=%%LDB^V=[#C8>I'`:&+ MCSMIO(MBGY`=+TX0#5`84?QQAT8[?_F?/_S'+_^YN_OWDZNO7A#YZ1+3Q/,9 M1@D.O$>2W'DGT2/%W@U:+##S!-UGBFY#^.-VE7]Y'[&"/_^_M M;'"]WI_M'Q[,9M[AA]<''PY>>HAA[H`R- M/^[<)%.1OGA*28UZL>C@G:V__=O7Z_] M.[Q$NX1R]?TU%V]&QC=[__[]OO@62&/R(1;\7R,?)<*\K7)Y2@K^UVY!MLL_ MVIT=[A[-]I[B8`=LX'F_L"C$5WCN"0$^)*M[P"HFR_N0"RX^NV-X_G''7]"G M76['@U<'1YS_C]<)X,8AC"_F%_>8"7'C'8^W^./JO!3W5KI<(K:ZF%^3!85H]1'\EN]'*4V@%[F,0N(3;&(^ MPW9Z"WR&"/L;"E/\#:,X91ED[?(IV'J+PUV%__?Y7REY0"%O%:`ZIP\X3@Q% M,VBBMYB\-9I$S`C+&O$`/QW@9>82W&`=;@R#_I3;^"X*`TBS>`^1K#H*VJ6M[0J> MCV'P*::QB"`0$O?40-7H`*I$_C]/(&$3[4/CAB.VBF^`CA02V06!-/PXCK$8 M)+Y$4?!(#)Q`Q]N_,T&,P7"_NK@-R<(T_90R]1^.(Y%OP"S(:*1KD`_C,U?X M/F7^'7@`#%@+AI:&/B/AZR\07O#`Z91RRGAR02#,8OA*?/@5?KQAY-?$#?G,+F)U"^;2)N@IHM$2G"*;R:7Q/DRG%PC=\PG=^WT<)N4G M?#[W?O=@EL_G_IA__%O6$94B'M]"NH#\I/B]$-WB4$BAIMRW)?LUI*'Q%88T M,,7?L4YV):4UV3]%,0P4O'?CO=PU9@_$Q_$UC!D:-4R8K&D$=LU+F\QRV>5\46:B)T2F!!H0J][$X['97>%BB'[Z-W>V]=]?00F\F[U MP`I[G)(PA4\WS&+N(NH6;'G(<\.AQ774B@XUO=Y[<]A[ MF''.`2Z2.\R^0S/9JA5=9,;[_,27C+$$^C8&QT%O$[\8&@:%VAJZ9Q&#GHY^ M2D%LZJ]N&*(Q&`44^H((Y2L?)W@.-#?H20)U)V['<>^D2^D$L[UWO5-+%Z?W M%W7O5RSH2:D<'3X;C9)7[@"@,"X=V"%4_R`P^B>6T[M`BWTCB/?(GT%\,-W M[P^F&?V5)3;]*JV3^V&=]L'L^:/YAE[[_DKIEZ^=67$>'&K%`O7:,/:7II\+ MZ>8:]?0FAA7;M`?IB".S%HZO#O>F.#XTMC#;ZR?L8=E2\J'8E)UV?UI5MO#N M=AAKE"."LR;W-OI7)W`4?4\[B&NR$2&X%OIENU6W-K8W4F_GB@R&G7,F+/63 ME,$L_!HG28CSXT+GRWM$&/^C>FY"-@GMU(#[L]).ZE37)=Z\G?5?=72BPUL? M'LK,5EUWEQ:@ZL@=1UPO?(GO4?]:!1?C/]/Y!CWE"R\GF&+Y:H22TGE\%7(7 MT+Z>2,@6R^9G8*'L8$(*+KRN:L_V24ISX/@;H<(#SVF"`3K1R=5:R4[(?,/) M750_3ZAPCA?Z]5$XW`O9HG#B5V_=F0"WUT#""!K`(-M6`[DF:(*C#K MU6$#GP-P!L2\C-(`QI)R;$"6@F_GM$M^:G&_>6QQZ,.,C2M,\G:*,XR'VC., M.:^7,UM;(EN?L3XC%"0B*+R,8B(<2'/\SXC-6DA])>B6A"`-%AL4O.*P?GA< MK9DYJ[4%P@Z0%0%HKM5+GC^SZ!9979KNK)6.V!;T7?U:`O^&+E,^59??1!1? MHA6_QBS770*VBM`!H!6>6D"KDGSBL+(4Y-\PDAQ9%>THP%4)/^5^.E>[LM#2 MBJ^,=C3XRH2?\N:54>".,V(UH3KK?=6!BUCR0STD6]445S)5+M;A'-(RIA8. M!U#NE%VU*C3E6.XTN7)Q.O5^F"'CE%)^X6%,1X742>W/E+D%F3O&<^-*=9!,F]X$VT6+*'79%7W$V4W*+(M^] M_(Z3B[G\F&+G%MQWBLXJ#=7#NU>'OFDTHX%\#"C+I!XL.7>BFJ0MF7G&@O?X M,K-VC;8"NAOAF]_SJL[!FP1CVL9HRC[E%"W3M7V?0D%G"U:Y_]4!_%WM0?"; M3?BR0..F_^038FP%":AR$F7&9Q?GEM4P0QTF5M!1O*.PDA\WJ7_M-'YU4;>S MJF$-IM-<9LCG,V.`DNKE:"VUTR!J)=_2VO0@A:>7#-\C$N3UWSR7R^9FN;I" M%UDEJAF?LYAUT*%`;X(7Z]7,U);V.(RF1-8"M:U4O=F8=$9T<8/94G_40$KE M9I8J%77*&^Z7C!^=2E:7(1)GYGBR)JYUD6

G(W,=7+/.4%7]GX_SVB?J=4 MI\K@)L!M4D]Y3RY_TR>4@+G^RDW8UO(-ELRXB)#(WG*_U,6>@LY-[!3"#I;? MN)J5*M-15X%JSA=ZCW-.;'8ZP5#D;*E?>E3-!'BDE_ M?A$:WVN$OXANX;B=Q0%O,-S24>LPU)C0,@7;_AGKZH.Q?!_Y+(P>-\]:O]*> MM88_`KZ-TGPYEK?GB0:=>#FV4A%3:FIV!EM"/LUZA]\L7C]H`D^GP@>NS&!K M)?<8HC/X3`/;L_*)UKL,COZ`"YX9]B`A2]Q$_U((>$Y]AE&,3W'V_\9.H&(? MKR^H-'*B'&/(NVWF<^R#F3X_^7)Q!VZL8_!';IIM(U3!M9\ M@:]*\5?>^"VLD/V=K'[$?$$C+_ZEBV,_(0_97$B=]#RGD3'XQ7/TFO*F-1C" MQS@0ERB>QW'*[THJWHO\`=D\@[X3+$L>^.2GN!P,!_S<#F3Z`F&^TQ\#69CR MER7%Y/I"6$C6TVSY]VRYX/-CKE(WL4W#3+GR&_IX',^/UP9Z*3_>LGKEI>PVE8_:=+EI.^J(.A2&R&L>>Z9>VD1&G7UJ])ET0 MBE9BE?0F.O9A0L(OO=;5]NK)'>L\##R^3'ZT>G5V@"8<0@=AQGV*%TC2?$/\98UD)>ZW"4,L'O*-+^8M;O&<5D;L+<]1=]*3N&;X*(NP3?H4 M#?.(?::#EIWSV/'T-^:&[)64C-E3NFBYI1-&3OM*^1!YGT16V\B($UFM7E-> M@P%[5!^FE_E!]7O'N@<#GZX`7U5D*$P3S!Q#]#CXOS3/GFZB*^Q',(T7):]K M]6^B_AW$=GYFO/ZU'7O\'N;0%_-3PBU"@UA=MFK&]-NA"^3T0TBI`.:&UHPQ;')YK]_A)=![J M\6H7'<)P[G=*8C][N1`'ZX<+%956/=ISK(?I,(_NJ?B$KUPQWV9M'[$&:=-F MNK/M?FPP`W5WR"TG3(K;G"J=]DFZND4;*;"2RK&^QC#C5:I33,T[O/PZGA2W M.)EB_CYU*\=4>P`CYL/NX MB1+DC%N<8M##)P(T:8=1_7K:O4-5TV+[[\W>)#N#XV7$$O+O+-69-P^ZRU9H M6QBF[!EMNA?'/X_VICER\(?3L,"S9@@Q:4NS=Y@N&5Z2=!GK2U2>V]"DG>N9 M-BF<[LW>ZS?F7O?,W';[)X]/(S\53\U3,0U#='5.YQ%;UL:EX@0R/W]<,%3_ MB6C@?:9`M?*JW$-,J"KR9;]0^0'%QE8'OJV$-HUH]E>`23.TX:/?,GFN\()P M,6CR'2UE:YYR,ALAV1F(LJ1=JH)ZU]8B')]`-8;"R7Q2'[4QB7-/9OT(T2B(8.ZN)# M*X@<@X@!%_,L1`OIY*#V_:@0:,BN.95B-1C.(!]$X3\P8F?PB2RY5E*."@ZE M%IJ5=P>`R>+7#)H:[8C!J>FA*8*U`D]^-]/:C=3CB)IT5."HU=!<1&LQT_T5 MA^%?:?1(KS&*(PK3YCA.,9,`U$(_*I1:="F@V.B,A9M+3 MTG*Z$4*SH4,Y370*DCS:K_`]7S7B!_U1(AU[].0C!$BE2H&3*PE")JWPHD_0 M#2\BII[--ZA&B$I#@P(,5]*!3,C+]#8D_ED8(=G>N(1FA$#4Y"]@<&ODK]0@ M9U>;7*1)G"#*+RQ1]V!:IA$"I5>H0$Z9"+S`9:#I<@GCX,7\FBPHF1.?GY', MKC\'$2\C<+-**5JQ-G]X,.-+\I"%AE&<,LRO"LT:XI>`5IKRUFUY96/6WG3! M%#/^)&XFA^:HBI+27O6R#IX;@/PDE-_<;(,'&OY3>8/T"0U39^B=U[;4A55'?FM#EQ%@Y;,(W90JEU&W70ZQ_5CC^_O-RV5I("ET6,?= M43/N./^?LQNP*\W\66Q85UL:(@Y;Y=7%9`?F0>J46W]/%6B=N:V%66<\RGKF M+NJ]V+'R[0=<\0ZV-+E\U0RM*K6]TMKUR]V:U%%.9O_E=+-A34]N*T?4F7[C M877=4#6%M)!74BRS7%@Y>CC8DZ$QIE3C_?I7M.P2*I(I5[WXR3-9]79;17 MOB]1`[*$_\7!0KN.8_YFP-;]W@71]EZ*/KA`;$&_0D M22)G&^LB&9W%DUFR\VC:3+*%P^8ILTPRTZ121VXOJ30"I'*,3*/$A,+I5TP6 M=PD.CN'GT0)GVQ:;X;6Q_%'P[>:,7LYIRTD;>GQ/E[>8%??L5[9A-!'8O8E! M,E4I`MHL5<]A\]#_?'QA3PV;O[*KN M4??J$08YG0.WT+:"49YDD*OP8EMQ-M`-P^B1!]-9Q$ZC]#:9IV%>`Q!?81_# M+/@VQ.KGB3ORVWVQON69XHZZ.)<:#7V?G_9M[^:=?@KB,86_3H^B#YCB[025 M.CH822^8L%T@:A4N,1.)L01U(RY[\)N^36^DQI1#?:.*\CA-[D"N?Z^S.CGJ MF]2C0GM3_"G?[KRAN#@O8X1P03E"=`O17^SJW1>H*5X/;$+'FF'TDZHC[:1J M_06O,JXT_5]>UKBHM>)7B\`WF,;9_AU?MW5Q`M8Q@3'BLYB-Y?+=\`14IT!. MX$#691ZU3>&+5$MV;YA]""!Z\3G\4W923$9D'8J:SVS8O"+I"]_F8F+U"^A3 M6*W+6=\;]1V#E]V@)_G;])IH'Z)1ZZANN&&![!#:;2?==D93+7G3M[H"1S1V^ M8;YW+<&@_K4MTVL]9OTX9E74PN_=L?2Q[Z?+-.2S/56OK82A`Z\MC&2.5+DC MU%3\`K>W[@"G$OGX`9&0=\DPV/(7?*^QSU_PY8U,/UEI,#-6E)WM. MZF;9GU-YTZF\2UW9[Z=0P"VK-^>H#:NK"6T>X--OY^ME'FJ3_EZLH((D+'%J M[]2L8K&%VGUP-8(/M3/N*L(_JWLZ>9A M@^=T!Y]I8!NX4=>DMT'85HM^*'D-8;PX-ONCHB\RFX:LJ:>SU:Q5LU@"Z'N: M+.'O8-N&OTL%(!B*`TH#:3V@WM(]ZS#[_?1T'//E;%9X^>'>I/U<73RR!<\> MXL>F[\M#6*GP7NDYE%$FRK5GMR4^U_A^.F[24*Q<@-_K\.[WJ*K.(>G,TLU3 M<'NZR*R5I:'BRPNA;?SY"3.?Q-*4^SF-N)N-/T>;XGWXB4R3R_N%*C,3?C>Z M!'LUJ;L(JV4NKVXP!K)I8R&@L,\^Q0N^561U`[L8P>*;2+'5RR]>G,^QGYR! M!863GT#W*$H)H4<5H$FWN@=JV5TO&4S%\K76B>0&)H81MKAMVN(*_RLE,4D@ MR6(/Q,=9SWJ%>9VK:$7& MNT[T#&6*$H:W6W&*ERB6![648]GZWLR#C1?T...NX/1JK-:\63JPZ$K;6Q@L M)I:%G2_F]9Y*5-5\BN(D7@M_B5;:9XFR7*YGB]9BU@C4="0;U]@<'FQGU%)5^H?W_% M@,U:Y):B\#>QZH*:73[?M0&+C[D8PU=$9U?==(<$1Q:,OR+&$$U6%[P'[E/EWD#]#K[%@:+DY5=Q\;)TS M>FM.KV`=(K#D4NDBK(UCD(<5Y#^B?6&AE<5:9)C9N'QXH561"3W%?(T7V;O3 M\X@M%6LG&P_$YDQ>E6L0I]L01AL'&FI[:Y*94.`]$>-=J]D88\1E+WQ:82D7 M($WTL/MZUR_[7&*^B@Y__#]02P,$%`````@`"X&B/DT-G,WK!@``9#D``!$` M'`!C9VYX+3(P,3$P-#`S+GAS9%54"0`#-0^_334/OTUU>`L``00E#@``!#D! M``#M6VUOVS80_CY@_X'3EVU`95EQNBY&W"(O;1$@68(DV_JMH"5:)BJ1+DG9 MSK_?D9(LVI(ENVTV%Q.*!A;O^/#N'O/M=#Y]LTQB-"="4LY&CM_K.XBP@(>4 M12,GE2Z6`:7.F]<__G#ZD^M^.+^_1B$/TH0PA0)!L"(A6E`U1>=\P0AZQ%%$ M1`\9Q3LL)!$%.O+[/?WOE>^Z.=P-C#.A@,#9$+WT?.^H[_OH:/BR/^P?H[.; M3%$&4Y)@!(8R.7*F2LV&GK=8+'J+08^+"#KU?>_#S?6#T7,RQ>%R+&*ZIJY; MB@X#CS*I,`M(H1]3]JE!78O'6*[4EQ7]W!K_Y.3$,U('*2PBHO[`"9$S')"5 M>L`C1I:]@"?&8[=_[/8'!7(0L66;)HF)9N`=%\DEF>`T5B/G*K"FDS%+)Q@*"U=.,E&$U3J?2*P3:^1.W[[L#WP$N$#K%C'&%%1!JGG7+ M;$;9A.>/T*"='PH>DT>`0/K#G_=7=2YID?=`(NW+%4"(Q``[B(8CIZ9]-40Q M2$@FE%%C3/_(/T8NNJ0RB+E,!8&''`)9&*?>9L=-S%22\):]-I]G@D@`,#VO MH2'OG:LT]0QP'*3Q%W0L+=O>+V\M0OS%D5<\^'1/9JD(IO#5OA,\$CC)HU\O M:V'`KS"@85")@W*@CH:2A@O.%"RWL.Q2(K/HKS1_AL+ M@9EZNAW'-#*FYO&N$[1$_;?-J!<8R`+I@E\&_PH\8Q$=Q^1,2J+D&0O?+E)A4E%,JP$&8ARM'BCI2-+>`<%N;P@BT>ZX=8$ MDBE1%%S9@>5U_19R_>[$WQ.97FEWRYNH>+W MZFUR#0F54!T=-AUS<(Z+50[+;F@)>25Q:_7M8FQE"K&*G7M3" M265/UBC(P"`;I^/`NF>G28+%$]R::90MX$R=!0%/37[\#NY*9)6_8LXS6)@]55X/-JLTTF12E,5+;.NC7LW>`BGJ MJ7MCV)*XDK<3O1N\B_E";N2HUD3-&8SCQEPC/,!M6MJ)*:GGD=F&#'Q'S98T M4TUFJ2V9U$C%>C*I"WO]C+B=$6&_5=PB:R;"WRW_;F9""?H_H$3_T14X]V2" M3'W-4%>HC!Q)DUFLZW),VU20R1I^H8[#3^V:N`]/[ MNK[YY7@FW^^L89[)^1B/]W4>NI#X&;V^UOC/Y"Y,L7W=79^5S^3SY6J06L=/ M/;N`#)[6"\Q.P6\N%&*5*KJFFKZL9O":9RF;AB[ZR2WZN;K)]8_<@=];RK"P M<1\3RACL9T+1;V\3BHJ]D%"[6&_;\`HO.>,)T-6S:OTBC&>FM\TBL5BU?8T^EFO%K#3*`VRS*ZS/-*4!/TH^PVLTP#=\N=?D#T>F8 M6S4EXB(5^JU<5J3B&`_,RKB#;K8JF"K78<(947#+O(*S@=XYP;ET+&'ZI=JU M]X*GLT*5@@H,1&-8Z?3D5"+5\]7(8!Y3'CX:X&Q*J$(TS@Z`(R3-WE[4PKG:=/8US.ESK)P=)4U-3,_4$L!`AX#%`````@`"X&B/F)='0CV30``D4T# M`!$`&````````0```*2!`````&-G;G@M,C`Q,3`T,#,N>&UL550%``,U#[]- M=7@+``$$)0X```0Y`0``4$L!`AX#%`````@`"X&B/G;\G(T/#0``;I0``!4` M&````````0```*2!04X``&-G;G@M,C`Q,3`T,#-?8V%L+GAM;%54!0`#-0^_ M375X"P`!!"4.```$.0$``%!+`0(>`Q0````(``N!HCX2OA!K0`8``)]0```5 M`!@```````$```"D@9];``!C9VYX+3(P,3$P-#`S7V1E9BYX;6Q55`4``S4/ MOTUU>`L``00E#@``!#D!``!02P$"'@,4````"``+@:(^>>L_^)(H``!J\@$` M%0`8```````!````I($N8@``8V=N>"TR,#$Q,#0P,U]L86(N>&UL550%``,U M#[]-=7@+``$$)0X```0Y`0``4$L!`AX#%`````@`"X&B/D^"?42F%P``BEP! M`!4`&````````0```*2!#XL``&-G;G@M,C`Q,3`T,#-?<')E+GAM;%54!0`# M-0^_375X"P`!!"4.```$.0$``%!+`0(>`Q0````(``N!HCY-#9S-ZP8``&0Y M```1`!@```````$```"D@02C``!C9VYX+3(P,3$P-#`S+GAS9%54!0`#-0^_ F375X"P`!!"4.```$.0$``%!+!08`````!@`&`!H"```ZJ@`````` ` end XML 16 R8.xml IDEA: Summary of Significant Accounting Policies 2.2.0.25falsefalse0201 - Disclosure - Summary of Significant Accounting Policiestruefalsefalse1falsefalseUSDfalsefalse1/1/2011 - 4/3/2011 USD ($) USD ($) / shares $Jan-01-2011_Apr-03-2011http://www.sec.gov/CIK0000851205duration2011-01-01T00:00:002011-04-03T00:00:00USDStandardhttp://www.xbrl.org/2003/iso4217USDiso42170USDEPSDividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0SharesStandardhttp://www.xbrl.org/2003/instancesharesxbrli0USDUSD$2true0us-gaap_GeneralPoliciesAbstractus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringNo definition available.falsefalseSummary of Significant Accounting Policies [Abstract]3false0us-gaap_SignificantAccountingPoliciesTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseverboselabel1falsefalsefalse00  <div align="left" style="font-family: 'Arial',Times,serif">   <div align="left"> </div> <div align="center" style="font-size: 10pt; margin-top: 0pt"><b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 1: Summary of Significant Accounting Policies</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">As permitted by the rules of the Securities and Exchange Commission applicable to Quarterly Reports on Form 10-Q, these notes are condensed and do not contain all disclosures required by generally accepted accounting principles. Reference should be made to the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In the opinion of the management of Cognex Corporation (the “Company”), the accompanying consolidated unaudited financial statements contain all adjustments, consisting of normal, recurring adjustments necessary to present fairly the Company’s financial position as of April 3, 2011, and the results of its operations for the quarters ended April 3, 2011 and April 4, 2010, and changes in shareholders’ equity and cash flows for the periods presented. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The results disclosed in the Consolidated Statements of Operations for the quarter ended April 3, 2011 are not necessarily indicative of the results to be expected for the full year. </div> </div>    <div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 15: Dividends</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">On February 10, 2011, the Company announced that the Board of Directors declared a cash dividend of $0.08 per share. The dividend was paid on March 18, 2011 to all shareholders of record at the close of business on March 4, 2011. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">On May 2, 2011, the Company’s Board of Directors declared a cash dividend of $0.09 per share. The dividend is payable on June 17, 2011 to all shareholders of record at the close of business on June 3, 2011. </div> </div>    <div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 11: Stock Repurchase Program</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In April 2008, the Company’s Board of Directors authorized the repurchase of up to $50,000,000 of the Company’s common stock. As of April 3, 2011, the Company had repurchased a total of 1,038,797 shares at a cost of $20,000,000 under this program. The Company did not purchase any shares under this program during the quarter ended April 3, 2011. The Company may repurchase shares under this program in future periods depending upon a variety of factors, including, among other things, stock price levels, share availability, and cash reserve requirements. </div> </div>    <div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 5: Intangible Assets and Goodwill</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The change in the carrying value of goodwill during the period ($320,000) is wholly attributable to fluctuations in foreign currency exchange rates, as a portion of this asset is recorded on the books of the Company’s Irish subsidiary. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company evaluates the possible impairment of goodwill and other intangible assets whenever events or circumstances indicate that the carrying value of these assets may not be recoverable. No triggering event occurred in the quarter ended April 3, 2011 that would indicate a potential impairment of goodwill or other intangible assets. However, the Company continues to monitor market conditions, and changes in market conditions could result in an impairment of goodwill or other intangible assets in a future period. </div> </div>    <div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 7: Contingencies</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In May 2008, the Company filed a complaint against MvTec Software GmbH, MvTec LLC, and Fuji America Corporation in the United States District Court for the District of Massachusetts alleging infringement of certain patents owned by the Company. In April 2009 and again in June 2009, Defendant MvTec Software GmbH filed re-examination requests of the patents-at-issue with the United States Patent and Trademark Office. This matter is ongoing. </div>   </div>  <div style="font-family: 'Arial',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In May 2009, the Company pre-filed a complaint with the United States International Trade Commission (ITC) pursuant to Section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. §1337, against MvTec Software GmbH, MvTec LLC, Fuji America, and several other respondents alleging unfair methods of competition and unfair acts in the unlawful importation into the United States, sale for importation, or sale within the United States after importation. By this filing, the Company requested the ITC to investigate the Company’s contention that certain machine vision software, machine vision systems, and products containing the same infringe, and respondents directly infringe and/or actively induce and/or contribute to the infringement in the United States, of one or more of the Company’s U.S. patents. In July 2009, the ITC issued an order that it would institute an investigation based upon the Company’s assertions. In September 2009, the Company reached a settlement with two of the respondents, and in December 2009, the Company reached a settlement with five additional respondents. In March 2010, the Company reached a settlement with respondent Fuji Machine Manufacturing Co., Ltd. and its subsidiary Fuji America Corporation. These settlements did not have a material impact on the Company’s financial results. An ITC hearing was held in May 2010. In July 2010, the Administrative Law Judge issued an initial determination finding two of the Company’s patents invalid and that respondents did not infringe the patents-at-issue. In September 2010, the Commission issued a notice that it would review the initial determination of the Administrative Law Judge. The ITC issued its Final Determination in November 2010 in which it determined to modify-in-part and affirm-in-part the Administrative Law Judge’s determination, and terminate the investigation with a finding of no violation of Section 337 of the Tariff Act of 1930 (as amended 19 U.S.C. §1337). The Company has filed an appeal of the decision with the United States Court of Appeals for the Federal Circuit. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company cannot predict the outcome of the above-referenced pending matters and an adverse resolution of these lawsuits could have a material adverse effect on the Company’s financial position, liquidity, results of operations, and/or indemnification obligations. In addition, various other claims and legal proceedings generally incidental to the normal course of business are pending or threatened on behalf of or against the Company. While we cannot predict the outcome of these incidental matters, we believe that any liability arising from them will not have a material adverse effect on our financial position, liquidity, or results of operations. </div> </div>    <div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 8: Indemnification Provisions</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Except as limited by Massachusetts law, the by-laws of the Company require it to indemnify certain current or former directors, officers, and employees of the Company against expenses incurred by them in connection with each proceeding in which he or she is involved as a result of serving or having served in certain capacities. Indemnification is not available with respect to a proceeding as to which it has been adjudicated that the person did not act in good faith in the reasonable belief that the action was in the best interests of the Company. The maximum potential amount of future payments the Company could be required to make under these provisions is unlimited. The Company has never incurred significant costs related to these indemnification provisions. As a result, the Company believes the estimated fair value of these provisions is minimal. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In the ordinary course of business, the Company may accept standard limited indemnification provisions in connection with the sale of its products, whereby it indemnifies its customers for certain direct damages incurred in connection with third-party patent or other intellectual property infringement claims with respect to the use of the Company’s products. The term of these indemnification provisions generally coincides with the customer’s use of the Company’s products. The maximum potential amount of future payments the Company could be required to make under these provisions is generally subject to fixed monetary limits. The Company has never incurred significant costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the Company believes the estimated fair value of these provisions is minimal. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In the ordinary course of business, the Company also accepts limited indemnification provisions from time to time, whereby it indemnifies customers for certain direct damages incurred in connection with bodily injury and property damage arising from the installation of the Company’s products. The term of these indemnification provisions generally coincides with the period of installation. The maximum potential amount of future payments the Company could be required to make under these provisions is generally limited and is likely recoverable under the Company’s insurance policies. As a result of this coverage, and the fact that the Company has never incurred significant costs to defend lawsuits or settle claims related to these indemnification provisions, the Company believes the estimated fair value of these provisions is minimal. </div> </div>    <div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 13: Weighted-Average Shares</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Weighted-average shares were calculated as follows (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>Quarter Ended</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>April 3,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2">April 4,</td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Basic weighted-average common shares outstanding </div></td> <td> </td> <td> </td> <td align="right"><b>41,336</b></td> <td> </td> <td> </td> <td> </td> <td align="right">39,667</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Effect of dilutive stock options </div></td> <td> </td> <td> </td> <td align="right"><b>950</b></td> <td> </td> <td> </td> <td> </td> <td align="right">16</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Weighted-average common and common-equivalent shares outstanding </div></td> <td> </td> <td> </td> <td align="right"><b>42,286</b></td> <td> </td> <td> </td> <td> </td> <td align="right">39,683</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Stock options to purchase 539,569 and 4,498,540 shares of common stock, on a weighted-average basis, were outstanding for the quarters ended April 3, 2011 and April 4, 2010, respectively, but were not included in the calculation of diluted net income per share because they were anti-dilutive. </div> </div>    <div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 9: Derivative Instruments</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company is exposed to certain risks relating to its ongoing business operations including foreign currency exchange rate risk and interest rate risk. The Company does not currently manage its interest rate risk with derivative instruments; however, foreign currency exchange rate risk is currently mitigated with derivative instruments. The Company uses derivative instruments to provide an economic hedge against its transactional currency/functional currency exchange rate exposures. Forward contracts on currencies are entered into to manage the transactional currency/functional currency exposure of the Company’s Irish subsidiary’s accounts receivable denominated in U.S. dollars and intercompany receivables denominated in Japanese Yen. These forward contracts are used to minimize foreign currency gains or losses, as the gains or losses on these contracts are intended to offset the losses or gains on the underlying exposures. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">These forward contracts do not qualify for hedge accounting. Both the underlying exposures and the forward contracts are recorded at fair value on the Consolidated Balance Sheets and changes in fair value are reported as “Foreign currency loss” on the Consolidated Statements of Operations. The Company recorded net foreign currency losses of $59,000 and $165,000 as of April 3, 2011 and April 4, 2010, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">As of April 3, 2011, the Company had the following outstanding forward contracts that were entered into to mitigate foreign currency exchange rate risk: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="15%"> </td> <td width="25%"> </td> <td width="20%"> </td> <td width="40%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Currency</b></td> <td> </td> <td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Amount</b></td> <td></td> </tr>   <tr valign="bottom"> <td valign="top" nowrap="nowrap"> <div style="margin-left:0px; text-indent:-0px">Japanese Yen/Euro </div></td> <td> </td> <td align="left" valign="top" nowrap="nowrap">225,000,000 Japanese Yen</td> <td></td> </tr> <tr valign="bottom"> <td valign="top"> <div style="margin-left:0px; text-indent:-0px">U.S. Dollar/Euro </div></td> <td> </td> <td align="left" valign="top">12,150,000 U.S. Dollars</td> <td></td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Information regarding the fair value of the forward contracts outstanding as of April 3, 2011 and December 31, 2010 was as follows (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Asset Derivatives</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Liability Derivatives</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Balance Sheet</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Balance Sheet</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Location</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>April 3, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">December 31, 2010</td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Location</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>April 3, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">December 31, 2010</td> <td> </td> </tr>   <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Currency forward contracts </div></td> <td> </td> <td colspan="3" align="center">Prepaid expenses and other current assets</td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>212</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">83</td> <td> </td> <td> </td> <td colspan="3" align="center">Accrued expenses</td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">125</td> <td> </td> </tr>  <tr> <td colspan="27"> <div align="left" style="font-size: 10pt; margin-top: 6pt">Information regarding the effect of the forward contracts, net of the underlying exposure, on the Consolidated Statements of Operations for the quarter ended April 3, 2011 and April 4, 2010 were as follows (in thousands): </div> </td> </tr>  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Location</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>Amount of Gain Recognized in</b></td> <td> </td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>of Gain Recognized</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Income on Derivatives</b></td> <td> </td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>in Income on</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>Quarter ended</b></td> <td> </td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Derivatives</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>April 3, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">April 4, 2010</td> <td> </td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> </tr>   <tr valign="bottom"> <td nowrap="nowrap"> <div style="margin-left:15px; text-indent:-15px">Currency forward contracts </div></td> <td> </td> <td colspan="3" align="center">Foreign currency gain</td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>2</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">67</td> <td> </td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> <td></td> </tr>  </table> </div>   </div>  <div style="font-family: 'Arial',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> </div>    <div align="left" style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 2: Fair Value Measurements</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><u>Financial Assets that are Measured at Fair Value on a Recurring Basis</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the financial assets measured at fair value on a recurring basis as of April 3, 2011 (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Quoted Prices in</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Active Markets for</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Significant Other</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Identical Assets</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Observable</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(Level 1)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Inputs (Level 2)</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Assets: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Money market instruments </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>7,325</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>—</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Treasury bills </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>10,385</b></td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Municipal bonds </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>111,143</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Corporate bonds </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>80,580</b></td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Agency bonds </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>40,568</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Sovereign bonds </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>24,232</b></td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Covered bonds </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>6,570</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Currency forward contracts </div></td> <td> </td> <td> </td> <td align="right"><b>212</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The majority of the Company’s investments are reported at fair value based upon model-driven valuations in which all significant inputs are observable or can be derived from or corroborated by observable market data for substantially the full term of the asset, and are therefore classified as Level 2 investments. These investments are priced daily by a large, third-party pricing service. The service maintains regular contact with market makers, brokers, dealers, and analysts to gather information on market movement, direction, trends, and other specific data. They use this information to structure yield curves for various types of debt securities and arrive at the current day’s valuations. The Company’s money market instruments are reported at fair value based upon the daily market price for identical assets in active markets, and are therefore classified as Level 1. The Company did not record an other-than-temporary impairment of investments in the quarter ended April 3, 2011. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s forward contracts are reported at fair value based upon quoted U.S. Dollar foreign currency exchange rates, and are therefore classified as Level 1. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><u>Financial Assets that are Measured at Fair Value on a Non-recurring Basis</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company has an interest in a limited partnership, which is accounted for using the cost method and is measured at fair value on a non-recurring basis. The fair value of the Company’s limited partnership interest is based upon valuations of the partnership’s investments as determined by the General Partner. Publicly-traded investments in active markets are reported at the market closing price less a discount, as appropriate, to reflect restricted marketability. Fair value for private investments for which observable market prices in active markets do not exist is based upon the best information available including the value of a recent financing, reference to observable valuation measures for comparable companies (such as revenue multiples), public or private transactions (such as the sale of a comparable company), and valuations for publicly-traded comparable companies. The amount determined to be fair value also incorporates the General Partner’s own judgment and close familiarity with the business activities of each portfolio company. Management monitors the carrying value of this investment compared to its fair value to determine if an other-than-temporary impairment has occurred. If a decline in fair value is considered to be other-than-temporary, an impairment charge would be recorded to reduce the carrying value of the asset to its fair value. The portfolio consists of securities of public and private companies, and consequently, inputs used in the fair value calculation are classified as Level 3. The Company did not record an other-than-temporary impairment of this asset in the quarter ended April 3, 2011. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><u>Non-financial Assets that are Measured at Fair Value on a Non-recurring Basis</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Non-financial assets such as goodwill, intangible assets, and property, plant, and equipment are measured at fair value only when an impairment loss is recognized. The Company did not record an impairment charge related to these assets in the quarter ended April 3, 2011. </div> </div>    <div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 14: Segment Information</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company has two reportable segments: the Modular Vision Systems Division (MVSD) and the Surface Inspection Systems Division (SISD). MVSD develops, manufactures, and markets modular vision systems that are used to control the manufacture of discrete items by locating, identifying, inspecting, and measuring them during the manufacturing process. SISD develops, manufactures, and markets surface inspection vision systems that are used to inspect surfaces of materials processed in a continuous fashion, such as metals, papers, non-wovens, plastics, and glass, to ensure there are no flaws or defects on the surfaces. Segments are determined based upon the way that management organizes its business for making operating decisions and assessing performance. The Company evaluates segment performance based upon income or loss from operations, excluding stock-based compensation expense. </div>   </div>  <div style="font-family: 'Arial',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes information about the segments (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>MVSD</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>SISD</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Reconciling <br /> Items</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Consolidated</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Quarter Ended April 3, 2011 </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Product revenue </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>62,817</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>6,060</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>68,877</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Service revenue </div></td> <td> </td> <td> </td> <td align="right"><b>1,969</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>3,548</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>5,517</b></td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Operating income </div></td> <td> </td> <td> </td> <td align="right"><b>22,027</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>997</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(5,656</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td> </td> <td align="right"><b>17,368</b></td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Quarter Ended April 4, 2010 </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Product revenue </div></td> <td> </td> <td align="left">$</td> <td align="right">49,660</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">4,953</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">54,613</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Service revenue </div></td> <td> </td> <td> </td> <td align="right">1,497</td> <td> </td> <td> </td> <td> </td> <td align="right">2,857</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">4,354</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Operating income (loss) </div></td> <td> </td> <td> </td> <td align="right">15,445</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(328</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(3,865</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">11,252</td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Reconciling items consist of stock-based compensation expense and unallocated corporate expenses, which primarily include corporate headquarters costs, professional fees, and patent infringement litigation. Additional asset information by segment is not produced internally for use by the chief operating decision maker, and therefore, is not presented. Additional asset information is not provided because cash and investments are commingled and the divisions share assets and resources in a number of locations around the world. </div> </div>    <div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 6: Warranty Obligations</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company warrants its hardware products to be free from defects in material and workmanship for periods primarily ranging from six months to two years from the time of sale based upon the product being purchased and the terms of the customer arrangement. Warranty obligations are evaluated and recorded at the time of sale since it is probable that customers will make claims under warranties related to products that have been sold and the amount of these claims can be reasonably estimated based upon historical costs to fulfill claims. Obligations may also be recorded subsequent to the time of sale whenever specific events or circumstances impacting product quality become known that would not have been taken into account using historical data. Warranty obligations are included in “Accrued expenses” on the Consolidated Balance Sheets. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The changes in the warranty obligation were as follows (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="88%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Balance as of December 31, 2010 </div></td> <td> </td> <td align="left">$</td> <td align="right">1,985</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Provisions for warranties issued during the period </div></td> <td> </td> <td> </td> <td align="right">475</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Fulfillment of warranty obligations </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(385</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Foreign exchange rate changes </div></td> <td> </td> <td> </td> <td align="right">96</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Balance as of April 3, 2011 </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>2,171</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> </div>    <div style="font-family: 'Arial',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 10: Stock-Based Compensation</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s share-based payments that result in compensation expense consist solely of stock option grants. As of April 3, 2011, the Company had 7,102,350 shares available for grant under two stock option plans: the 2001 General Stock Option Plan (5,609,990) and the 2007 Stock Option and Incentive Plan (1,492,360). Each of these plans expires ten years from the date the plan was approved. The 2001 General Stock Option Plan will expire in December of 2011. Generally, stock options are granted with an exercise price equal to the market value of the Company’s common stock at the grant date, vest over four years based upon continuous service, and expire ten years from the grant date. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the Company’s stock option activity for the quarter ended April 3, 2011: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Weighted-</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Weighted-</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Remaining</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Contractual</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Aggregate</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Shares</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Exercise</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Term (in</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Intrinsic Value</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(in thousands)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Price</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>years)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(in thousands)</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Outstanding as of December 31, 2010 </div></td> <td> </td> <td> </td> <td align="right">4,318</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">20.05</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Granted </div></td> <td> </td> <td> </td> <td align="right">857</td> <td> </td> <td> </td> <td> </td> <td align="right">29.98</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Exercised </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(449</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">21.20</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Forfeited or expired </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(3</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">19.33</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Outstanding as of April 3, 2011 </div></td> <td> </td> <td> </td> <td align="right"><b>4,723</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>21.74</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>7.2</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>33,201</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Exercisable as of April 3, 2011 </div></td> <td> </td> <td> </td> <td align="right"><b>1,974</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>20.60</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>4.9</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>15,489</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The fair values of stock options granted in each quarter presented were estimated using the following weighted-average assumptions: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>Quarter Ended</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>April 3,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2">April 4,</td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid black"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid black">2010</td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Risk-free rate </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>3.6</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">3.7</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Expected dividend yield </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>1.0</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">1.0</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Expected volatility </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>42</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">43</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Expected term (in years) </div></td> <td> </td> <td> </td> <td align="right"><b>5.4</b></td> <td> </td> <td> </td> <td> </td> <td align="right">5.3</td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><u>Risk-free rate</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The risk-free rate was based upon a treasury instrument whose term was consistent with the contractual term of the option. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><u>Expected dividend yield</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The current dividend yield was calculated by annualizing the cash dividend declared by the Company’s Board of Directors for the current quarter and dividing that result by the closing stock price on the grant date. The current dividend yield was then adjusted to reflect the Company’s expectations relative to future dividend declarations. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><u>Expected volatility</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The expected volatility was based upon a combination of historical volatility of the Company’s common stock over the contractual term of the option and implied volatility for traded options of the Company’s stock. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><u>Expected term</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The expected term was derived from the binomial lattice model from the impact of events that trigger exercises over time. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The weighted-average grant-date fair values of stock options granted during the quarter ended April 3, 2011 and April 4, 2010 were $11.75 and $7.67, respectively. </div>   </div>  <div style="font-family: 'Arial',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company stratifies its employee population into two groups: one consisting of senior management and another consisting of all other employees. The Company currently expects that approximately 66% of its stock options granted to senior management and 68% of its options granted to all other employees will actually vest. Therefore, the Company currently applies an estimated forfeiture rate of 13% to all unvested options for senior management and a rate of 14% for all other employees. The Company revised its estimated forfeiture rates in the first quarter of 2011, and the cumulative effect of this change resulted in a reduction in compensation expense of approximately $80,000. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The total stock-based compensation expense and the related income tax benefit recognized for the quarter ended April 3, 2011 were $2,352,000 and $791,000, respectively. For the quarter ended April 4, 2010, the Company recorded a net benefit from stock options of $33,000 and related tax expense of $20,000. No compensation expense was capitalized as of April 3, 2011 or December 31, 2010. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following table details the stock-based compensation expense by caption for each quarter presented on the Consolidated Statements of Operations (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>Quarter Ended</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>April 3,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2">April 4,</td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Product cost of revenue </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>165</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">58</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Service cost of revenue </div></td> <td> </td> <td> </td> <td align="right"><b>70</b></td> <td> </td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Research, development, and engineering </div></td> <td> </td> <td> </td> <td align="right"><b>809</b></td> <td> </td> <td> </td> <td> </td> <td align="right">251</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Selling, general, and administrative </div></td> <td> </td> <td> </td> <td align="right"><b>1,308</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(343</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>2,352</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(33</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The total intrinsic values of stock options exercised for the quarter ended April 3, 2011 and April 4, 2010 were $4,668,000 and $13,000, respectively. The total fair values of stock options vested for the quarter ended April 3, 2011 and April 4, 2010 were $7,002,000 and $7,937,000, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">As of April 3, 2011, total unrecognized compensation expense related to non-vested stock options was $11,191,000, which is expected to be recognized over a weighted-average period of 1.9 years. </div> </div>  <!-- Begin Block Tagged NotefalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringDisclosure of compensation-related costs for share-based compensation which may include disclosure of policies, compensation plan details, allocation of stock compensation, incentive distributions, share-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 123R -Paragraph 64, 65, A240 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 93-6 -Paragraph 53 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 falsefalseStock-Based Compensation12Stock-Based CompensationUnKnownUnKnownUnKnownUnKnownfalsetrue

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents