EMPLOYEE STOCK AND SAVING PLANS - Note 7

3 Months Ended

Apr. 01, 2012

Employee Stock and Saving Plans [Abstract]

Employee Stock and Saving Plans Disclosure

7. EMPLOYEE STOCK AND SAVING PLANS

The following table summarizes the combined activity under all of our equity incentive plans for the three months ended April 1, 2012:

			Weighted-	Restricted	Weighted-
	Awards	Stock	Average	Stock	Average
	Available	Options	Exercise	Units	Grant Date
	For Grant	Outstanding	Price	Outstanding	Fair Value
	(thousands)	(thousands)		(thousands)
Balances at December 31, 2011	2,067	6,489	$ 4.37	246	$ 3.50
Stock options:
Granted	(1,251)	1,251	$ 2.79	-	-
Exercised	-	(102)	$ 1.25	-	-
Cancelled or forfeited	257	(257)	$ 5.44	-	-
Restricted stock units:
Granted	-	-	-	-	-
Released	10	-	-	(13)	$ 5.86
Cancelled or forfeited	399	-	-	(228)	$ 3.32
Balances at April 1, 2012	1,482	7,381	$ 4.11	5	$ 5.68

The following table provides information pertaining to the our stock options and restricted stock units with time-based vesting for the three months ended April 1, 2012 and April 3, 2011 (in thousands, except weighted-average fair values):

	Three Months Ended
	April 1, 2012	April 3, 2011
Stock options:
Weighted-average fair value of options granted	$ 1.78	$ 1.51
Intrinsic value of options exercised	$ 159	$ 54
Cash received from options exercised	$ 127	$ 38

Stock Options

Options to purchase common stock granted under the 2005 Equity Incentive Plan (the "2005 Plan") are for periods not to exceed seven years. Generally, options to purchase stock under the 2005 Plan are granted at exercise prices that are at least 100 percent of the fair market value of our common stock on the date of grant. Generally, 25 percent of the options vest on the first anniversary of the vesting commencement date, and the remaining options vest 1/36 per month for the next 36 months thereafter.

We granted options to purchase 1.3 million and 1.2 million shares of common stock during the three months ended April 1, 2012 and April 3, 2011, respectively, with an estimated total grant-date fair value of $2.2 million and $1.8 million, respectively. We settle employee stock option exercises with newly issued common stock.

The following summarizes information about stock options outstanding as of April 1, 2012:

			Weighted-
		Weighted-	Average
		Average	Remaining	Aggregate
		Exercise	Contractual	Intrinsic
	Shares	Price	Life	Value
	(thousands)		(in years)	(thousands)
Stock options:
Vested and exercisable options	4,275	$ 5.25	3.0	$ 1,570
Vested and exercisable and expected to vest thereafter	6,746	$ 4.26	4.1	$ 2,427
Total outstanding options	7,381	$ 4.11	4.3	$ 2,611

The aggregate intrinsic value shown in the table above represents the total pre-tax intrinsic value, based on the closing price of our common stock of $2.77 on March 30, 2012, which would have been received by the option holders had all in-the-money option holders exercised their options as of that date. There were approximately 2.5 million shares of common stock subject to in-the-money options that were exercisable as of April 1, 2012.

Restricted Stock Units ("RSUs")

Our 2005 Plan provides for grants of time-based and performance-based RSUs, which are counted against the total number of shares of common stock available for grant under the 2005 Plan at 1.75 shares of common stock for every RSU.

Time-Based Restricted Stock Units

Generally, 25 percent of time-based RSUs vest on each anniversary date of the vesting commencement date or date of grant. On occasion and for varying purposes, we grant time-based RSUs with different vesting criteria and duration.

During the three months ending April 1, 2012 and during 2011, we did not grant any time-based RSUs.

Performance-Based Restricted Stock Units

The vesting of performance-based RSUs is contingent on our achievement of certain predetermined financial goals and in some cases, the achievement of certain market performance targets. The amount of stock-based compensation expense recognized in any one period can vary based on the achievement or anticipated achievement of specific performance goals. If a performance goal is not met or is not expected to be met, no compensation cost would be recognized on the underlying RSUs, and any previously recognized compensation expense on those RSUs would be reversed.

As of December 31, 2011, we had 0.2 million performance-based RSUs outstanding. These performance-based RSUs expired during the first quarter of 2012. We did not record any compensation expense related to these performance-based RSUs during the three months ended April 1, 2012 and April 3, 2011 since the performance targets were not met.