Stock-Based Compensation

6 Months Ended

Jul. 01, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

STOCK-BASED COMPENSATION

Employee Share Purchase Plan

At our 2012 Annual Meeting of Shareholders, which was held on May 10, 2012, our shareholders approved an amendment to our Employee Share Purchase Plan to increase the number of shares of our common stock reserved for issuance under the plan from3,450,000 to 3,700,000.

1995 Stock Incentive Plan and 1995 Supplemental Stock Incentive Plan

Also at our 2012Annual Meeting of Shareholders, our shareholders approved an amendment to our 1995 Stock Incentive Plan (the “1995 Plan”) to increase the number of shares of our common stock reserved for issuance under the plan from10,500,000 to 10,750,000shares of our common stock. Our 1995 Supplemental Stock Incentive Plan (the “1995 Supplemental Plan”) allows for the issuance of a maximum of500,000 shares of our common stock.

The following table sets forth certain information regarding the 1995 Plan and the 1995 Supplemental Plan:

	July 1, 2012
Shares available for grant	2,559,295
Shares of common stock reserved for issuance	4,200,329

The following table sets forth certain information regarding all options outstanding and exercisable:

	July 1, 2012
	Options Outstanding		Options Exercisable
Number	851,248		272,045
Weighted average exercise price	$	29.16	$	21.73
Aggregate intrinsic value	$ 15.9 million		$ 7.1 million
Weighted average remaining contractual term	4.7 years		2.5 years

The following table sets forth certain information regarding all RSUs nonvested and expected to vest:

	July 1, 2012
	RSUs Nonvested		RSUs Expected to Vest
Number	789,788		692,026
Weighted average grant date per share fair value	$	32.99	$	32.75
Aggregate intrinsic value	$ 37.8 million		$ 33.1 million
Weighted average remaining term to vest	1.5 years		1.5 years

As of July 1, 2012, unrecognized stock-based compensation related to outstanding, but unvested stock options and RSUs was $27.6 million, which will be recognized over the weighted average remaining vesting period of 1.9 years.

Performance RSU

In 2011, our Compensation Committee approved performance-based restricted stock units to our Chief Executive Officer. The number of restricted stock units ultimately received depends on our business performance against specified performance targets set by the Compensation Committee. If the performance criteria are satisfied, the performance based restricted stock units will be granted following the public announcement of FEI's financial results for 2012. One-third of the units will vest upon grant, one-third will vest on the one-year anniversary of grant and the remaining one-third will vest on the two-year anniversary of grant.

Stock-Based Compensation Expense

Our stock-based compensation expense was included in our Consolidated Statements of Operations as follows (in thousands):

	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 1, 2012		July 3, 2011		July 1, 2012		July 3, 2011
Cost of sales	$	365	$	338	$	864	$	679
Research and development	443		446		957		898
Selling, general and administrative	2,255		2,034		4,855		4,030
Total stock-based compensation	$	3,063	$	2,818	$	6,676	$	5,607