Adaptec 2011 Annual Report Download - page 63

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Table of Contents
The following liabilities have been measured at fair value on a non-recurring basis, as follows:
(in thousands)
Fair value,
December 31, 2011
Level 2
Current liabilities:
2.25% senior convertible notes due October 15, 2025, net (see Note 10. Senior Convertible Notes) $ 67,913
(in thousands)
Fair value,
December 26, 2010
Level 2
Long-term liabilities:
2.25% senior convertible notes due October 15, 2025, net (see Note 10. Senior Convertible Notes) $ 74,791
NOTE 5. STOCK-BASED COMPENSATION
At December 31, 2011, the Company has two stock-based compensation programs, which are described below. The Company's stock-based awards
under these plans are classified as equity. The Company did not capitalize any stock-based compensation cost and recorded compensation expense as follows:
Stock-based compensation expense:
Year Ended
(in thousands)
December 31,
2011
December 26,
2010
December 27,
2009
Cost of revenues $ 945 $ 827 $ 779
Research and development 11,648 8,968 8,665
Selling, general and administrative 14,462 12,140 11,952
Total $ 27,055 $ 21,935 $ 21,396
The Company received cash of $16.8 million, $18.6 million and $28.3 million from the exercise of stock-based awards during 2011, 2010 and 2009,
respectively. The total intrinsic value of stock awards exercised during 2011 was $12.4 million.
As of December 31, 2011, there was $22.4 million of total unrecognized compensation cost related to unvested stock options granted under the
Company's stock option plans, which is expected to be recognized over a period of 2.7 years. As of December 31, 2011, there was $15.7 million of total
unrecognized compensation cost related to unvested Restricted Stock Units ("RSUs") awarded under the Company's stock option plans, which is expected to
be recognized over a period of 2.6 years.
The Company's estimates of expected volatilities are based on a weighted historical and market-based implied volatility. The Company uses historical
data to estimate option exercises and employee terminations within the valuation model. Separate groups of employees that have similar historical exercise
behavior are considered separately for valuation purposes. The expected term of options granted is derived from the output of the stock option valuation
model and represents the period of time that granted options are expected to be outstanding. The risk-free rate for periods within the contractual life of the
stock option is based on the U.S. Treasury yield curve in effect at the time of the grant.
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