Stock-based Compensation Expense

9 Months Ended

Sep. 30, 2012

Stock-based Compensation Expense

Stock-based Compensation Expense

K. Stock-based Compensation Expense

        The Company issues stock options, restricted stock and restricted stock units with service conditions, which are generally the vesting periods of the awards. The Company also has issued, to certain members of senior management, restricted stock and restricted stock units that vest upon the earlier of the satisfaction of (i) a performance condition or (ii) a service condition, and stock options that vest upon the earlier of the satisfaction of (a) performance conditions or (b) a service condition. In addition, the Company issues shares pursuant to an employee stock purchase plan ("ESPP").

        The effect of stock-based compensation expense during the three and nine months ended September 30, 2012 and 2011 was as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	(in thousands)
Stock-based compensation expense by type of award:
Stock options	$	18,869		$	20,610		$	59,774		$	64,137
Restricted stock and restricted stock units		7,104			7,878			21,643			21,543
ESPP share issuances		1,948			1,220			6,120			4,322
Less stock-based compensation expense capitalized to inventories		(339	)		(294	)		(888	)		(830	)
Total stock-based compensation expense included in costs and expenses	$	27,582		$	29,414		$	86,649		$	89,172
Stock-based compensation expense by line item:
Research and development expenses	$	17,444		$	18,652		$	54,425		$	57,654
Sales, general and administrative expenses		10,138			10,762			32,224			31,518
Total stock-based compensation expense included in costs and expenses	$	27,582		$	29,414		$	86,649		$	89,172

        The Company capitalized $0.3 million and $0.9 million, respectively, of stock-based compensation expense to inventories, in the three and nine months ended September 30, 2012 and $0.3 million and $0.8 million, respectively, of stock-based compensation expense to inventories, in the three and nine months ended September 30, 2011. All of this stock-based compensation expense was attributable to employees who supported the Company's manufacturing operations for the Company's products.

        The following table sets forth the Company's unrecognized stock-based compensation expense, net of estimated forfeitures, as of September 30, 2012 by type of award and the weighted-average period over which that expense is expected to be recognized:

	As of September 30, 2012
	Unrecognized Expense Net of Estimated Forfeitures		Weighted-average Recognition Period
	(in thousands)		(in years)
Type of award:
Stock options	$	174,454		2.87
Restricted stock and restricted stock units		62,039		2.73
ESPP share issuances		1,176		0.34

        The following table summarizes information about stock options outstanding and exercisable at September 30, 2012:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted-average Remaining Contractual Life		Weighted-average Exercise Price		Number Exercisable		Weighted-average Exercise Price
	(in thousands)		(in years)		(per share)		(in thousands)		(per share)
$  9.07–$20.00		1,163		3.21	$	15.53		1,163	$	15.53
$20.01–$30.00		1,434		6.60		29.29		1,023		29.08
$30.01–$40.00		12,882		7.17		36.10		7,204		35.18
$40.01–$50.00		2,327		9.61		48.11		70		44.55
$50.01–$60.00		2,355		8.97		53.37		691		54.43
$60.01–$64.30		65		9.63		63.10		4		63.10