Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2013

Summary of Stock Option Activity

The following table summarizes the Company’s stock option activity for the quarter ended March 31, 2013:

	Shares (in  thousands)			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2012		3,559		$	25.56
Granted		783			42.11
Exercised		(397	)		23.10
Forfeited or expired		(88	)		31.79
Outstanding as of March 31, 2013		3,857		$	29.04		7.5	$	50,634
Exercisable as of March 31, 2013		1,383		$	23.26		5.9	$	26,174
Options vested or expected to vest at March 31, 2013 (1)		3,386		$	28.22		7.3	$	47,243

(1) In addition to the vested options, the Company expects a portion of the unvested options to vest at some point in the future. Options expected to vest are calculated by applying an estimated forfeiture rate to the unvested options.

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

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

	Quarter Ended
	March 31, 2013			April 1, 2012
Risk-free rate		2.1	%		2.0	%
Expected dividend yield		0	%		1.2	%
Expected volatility		42	%		44	%
Expected term (in years)		5.9			5.7

Stock-Based Compensation Expense

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
	March 31, 2013		April 1, 2012
Product cost of revenue	$	227	$	240
Service cost of revenue		63		68
Research, development, and engineering		813		867
Selling, general, and administrative		2,195		2,139
	$	3,298	$	3,314