Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Incentive Compensation Plans (Notes)

v2.4.0.6
Stock-Based Incentive Compensation Plans (Notes)
 3 Months Ended
Mar. 30, 2013
Share-based Compensation [Abstract]  
Stock-Based Incentive Compensation Plans
Stock-Based Incentive Compensation Plans
The following table summarizes stock-based compensation expense related to employee stock options and restricted stock units, which is allocated in the Company’s condensed consolidated statements of operations:
 
 
 
Quarter Ended
 
 
March 30,
2013
 
March 31,
2012
 
 
(In millions)
Cost of sales
 
$
2

 
$
2

Research and development
 
13

 
11

Marketing, general and administrative
 
9

 
8

Stock-based compensation expense, net of tax of $0
 
$
24

 
$
21


For all periods presented, the Company did not realize any excess tax benefit related to stock-based compensation and therefore did not record any related financing cash flows.
Stock Options
The weighted average assumptions applied in the lattice-binomial model that the Company uses to value employee stock options are as follows:
 
 
 
Quarter Ended
 
 
March 30,
2013
 
March 31,
2012
Expected volatility
 
60.97
%
 
50.74
%
Risk-free interest rate
 
0.61
%
 
0.58
%
Expected dividends
 
0.00
%
 
0.00
%
Expected life (in years)
 
3.83 years

 
3.79 years


For the quarters ended March 30, 2013 and March 31, 2012, the Company granted 1,327,000 and 1,193,000 employee stock options, respectively, with weighted average grant date fair values per share of $1.17 and $2.20, respectively. In addition, during the first quarter of 2012, the Company granted unvested employee stock options to purchase approximately 4,792,000 shares of the Company’s common stock upon the closing of the SeaMicro acquisition on March 23, 2012, with weighted average estimated grant date fair values per share of $6.60.
Restricted Stock and Restricted Stock Units
For the quarters ended March 30, 2013 and March 31, 2012, the Company granted 2,447,000 and 830,000 restricted stock units, respectively, with weighted average grant date fair values per share of $2.69 and $6.57, respectively. In addition, during the first quarter of 2012, the Company granted approximately 322,000 shares of restricted stock upon the closing of the SeaMicro acquisition on March 23, 2012, with weighted average estimated grant date fair values per share of $4.03.