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Stock-Based Compensation
 6 Months Ended
Mar. 30, 2013
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stock-Based Compensation

(10) Stock-Based Compensation

The following presents stock-based compensation expense in the Company’s Consolidated Statements of Operations:

 

     Three Months Ended      Six Months Ended  
     March 30,
2013		      March 24,
2012		      March 30,
2013		      March 24,
2012		  

Cost of revenues

    $ 1,723       $ 1,275       $ 3,557       $ 2,382   

Research and development

      2,015         1,277         3,883         2,478   

Selling and marketing

      2,567         1,844         4,768         3,394   

General and administrative

      5,739         4,553         11,680         9,352   

Restructuring and divestiture

      6,969         —           7,191         —     
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ 19,013       $ 8,949       $ 31,079       $ 17,606   
  

 

 

     

 

 

     

 

 

     

 

 

  

The Company granted approximately 2.2 million and 2.1 million stock options during the six months ended March 30, 2013 and March 24, 2012, respectively, with weighted average exercise prices of $19.91 and $17.05, respectively. There were 17.3 million options outstanding at March 30, 2013 with a weighted average exercise price of $18.27.

The Company uses a binomial model to determine the fair value of its stock options. The weighted-average assumptions utilized to value these stock options are indicated in the following table:

 

     Three Months Ended     Six Months Ended  
     March 30,
2013		     March 24,
2012		     March 30,
2013		     March 24,
2012		  

Risk-free interest rate

      0.5 %     0.7 %     0.5 %     0.7 %

Expected volatility

      43.7 %     46.9 %     43.7 %     46.9 %

Expected life (in years)

      4.4        4.3        4.4        4.3   

Dividend yield

      —         —         —          —    

Weighted average fair value of options granted

    $ 5.83      $ 6.63      $ 6.99      $ 6.42   

The Company granted approximately 1.9 million and 1.5 million restricted stock units (RSU) during the six months ended March 30, 2013 and March 24, 2012, respectively, with weighted average grant date fair values of $19.86 and $17.09, respectively. As of March 30, 2013, there were 4.0 million unvested RSUs outstanding with a weighted average grant date fair value of $18.04. The Company also granted approximately 0.1 million market stock units (MSU) in the first quarter of fiscal 2013 to its chief executive officer and chief financial officer. The MSUs were valued at $18.49 using the Monte Carlo simulation model. Each recipient of the MSUs is eligible to receive between zero and 200% of the target number of shares of the Company’s common stock at the end of three years provided the Company’s stock price achieves the defined measurement criteria. The Company is recognizing compensation expense over the required service period, and since these are market-based awards, the compensation expense will be recognized by the Company regardless of whether the required criteria is met to receive such shares.

The Company uses the straight-line attribution method to recognize stock-based compensation expense for stock options and RSUs. The vesting term of stock options granted to employees is generally five years with annual vesting of 20% per year on the anniversary of the grant date, and RSUs granted to employees generally vest over four years with annual vesting at 25% per year on the anniversary of the grant date. The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that is ultimately expected to vest. Based on an analysis of historical forfeitures, the Company has determined a specific forfeiture rate for certain employee groups and has applied forfeiture rates ranging from 0% to 7% as of March 30, 2013. This analysis is periodically re-evaluated and forfeiture rates will be adjusted as necessary. Ultimately, the actual stock-based compensation expense recognized will only be for those stock options and RSUs that vest.

At March 30, 2013, there was $44.1 million and $58.1 million of unrecognized compensation expense related to stock options and stock units (comprised of RSUs and MSUs), respectively, to be recognized over a weighted average period of 3.4 years and 3.0 years, respectively.