v2.3.0.11
Stock-Based Compensation
 6 Months Ended
Jul. 03, 2011
Stock-Based Compensation  
Stock-Based Compensation

4. Stock-based Compensation

The Company grants options and restricted stock units from the Amended and Restated 2006 Long-Term Incentive Plan, under which awards may be granted to all employees. In addition, the Company's stock option program includes the 2003 Stock Plan, from which the Company does not currently grant awards, but may choose to do so. Award vesting periods for these plans are generally four years. As of July 3, 2011, a total of 806,823 shares were reserved for future grants under these plans.

Additionally, the Company sponsors an Employee Stock Purchase Plan (the "ESPP"), pursuant to which eligible employees may contribute up to 10% of base compensation, subject to certain income limits, to purchase shares of the Company's common stock. Employees may purchase stock semi-annually at a price equal to 85% of the fair market value on the purchase date.

The following table sets forth the total stock-based compensation expense resulting from stock options, restricted stock awards, and the ESPP included in the Company's Unaudited Condensed Consolidated Statements of Operations (in thousands):

 

     Three Months Ended      Six Months Ended  
     July 3,
2011		      June 27,
2010		      July 3,
2011		      June 27,
2010		  

Cost of revenue

    $ 243       $ 227       $ 478       $ 506   

Research and development

      606         572         1,267         1,153   

Sales and marketing

      1,384         1,193         2,685         2,405   

General and administrative

      1,275         1,131         2,450         2,200   
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ 3,508       $ 3,123       $ 6,880       $ 6,264   
  

 

 

     

 

 

     

 

 

     

 

 

  

The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option valuation model and the weighted average assumptions in the following table. The expected term of options granted is derived from historical data on employee exercise and post-vesting employment termination behavior. The risk free interest rate is based on the implied yield currently available on U.S. Treasury securities with an equivalent remaining term. Expected volatility is based on the historical volatility of the Company's stock for the three and six months ended July 3, 2011 and June 27, 2010:

 

     Stock Options     Stock Options  
     Three Months Ended     Six Months Ended  
     July 3,
2011		     June 27,
2010		     July 3,
2011		     June 27,
2010		  

Expected life (in years)

      4.4        4.5        4.4        4.5   

Risk-free interest rate

      1.73 %      2.16 %      1.80 %      2.19 % 

Expected volatility

      50 %      49 %      50 %      50 % 

Dividend yield

      —          —          —          —     

 

As of July 3, 2011, $25.8 million of total unrecognized compensation cost related to stock options, adjusted for estimated forfeitures, is expected to be recognized over a weighted-average period of 1.59 years. Additionally, $3.8 million of total unrecognized compensation cost related to non-vested restricted stock awards, adjusted for estimated forfeitures, is expected to be recognized over a weighted-average period of 1.16 years.