Stock-Based Compensation

3 Months Ended

Sep. 28, 2013

Stock-Based Compensation

NOTE 11. STOCK-BASED COMPENSATION

We recognize compensation expense in our statement of operations related to all share-based awards, including grants of stock options, based on the grant date fair value of such share-based awards. Estimating the grant date fair value of such share-based awards requires us to make judgments in the determination of inputs into the Black-Scholes stock option pricing model which we use to arrive at an estimate of the grant date fair value for such awards. The assumptions used in this model to value stock option grants for the three months ended September 28, 2013 and September 29, 2012 were as follows:

	Three Months Ended
	September 28, 2013		September 29, 2012
Stock options:
Expected life		—		5.1 years
Risk-free interest rate		—		0.7	%
Volatility		—		82.9	%
Dividend yield		—		—

The amounts included in cost of revenues and operating expenses for stock-based compensation for the three months ended September 28, 2013 and September 29, 2012 were as follows:

	Three Months Ended
	September 28, 2013			September 29, 2012
	(Thousands)
Stock-based compensation by category of expense:
Cost of revenues	$	252		$	274
Research and development		246			319
Selling, general and administrative		465			780
	$	963		$	1,373
Stock-based compensation by type of award:
Stock options	$	331		$	746
Restricted stock awards		658			517
Purchase rights under ESPP		—			180
Inventory adjustment to cost of revenues		(26	)		(70	)
	$	963		$	1,373

As of September 28, 2013 and June 29, 2013, we had capitalized approximately $0.3 million and $0.4 million, respectively, of stock-based compensation as inventory.