Stock-Based Compensation Expense (Tables)

9 Months Ended

Sep. 30, 2012

Summary of Stock Option Activity

The following table summarizes the Company’s stock option activity for the nine-month period ended September 30, 2012:

	Shares (in  thousands)			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2011		4,473		$	24.48
Granted		34			37.24
Exercised		(745	)		20.89
Forfeited or expired		(87	)		22.77
Outstanding as of September 30, 2012		3,675		$	25.37		7.3	$	34,143
Exercisable as of September 30, 2012		1,265		$	21.12		5.6	$	17,123

Weighted-Average Assumptions Used in Estimating Fair Values of Stock Options Granted

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

	Three-months Ended						Nine-months Ended
	September 30, 2012			October 2, 2011			September 30, 2012			October 2, 2011
Risk-free rate		2.0	%		3.6	%		2.0	%		3.6	%
Expected dividend yield		1.2	%		1.0	%		1.2	%		1.0	%
Expected volatility		44	%		42	%		44	%		42	%
Expected term (in years)		5.6			5.2			5.6			5.4

Stock-Based Compensation Expense

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

	Three-months Ended				Nine-months Ended
	September 30, 2012		October 2, 2011		September 30, 2012		October 2, 2011
Product cost of revenue	$	99	$	80	$	474	$	350
Service cost of revenue		26		27		134		136
Research, development, and engineering		385		394		1,735		1,732
Selling, general, and administrative		982		1,019		4,452		3,611
	$	1,492	$	1,520	$	6,795	$	5,829