STOCK-BASED COMPENSATION

3 Months Ended

Sep. 26, 2015

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

We recognize stock-based compensation expense in our condensed consolidated 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 were as follows:



	Three Months Ended
	September 26, 2015	September 27, 2014
Stock options:
Expected life	N/A	5.3 years
Risk-free interest rate	N/A	1.6%
Volatility	N/A	77.5%
Dividend yield	N/A	—

The amounts included in cost of revenues and operating expenses for stock-based compensation were as follows:



	Three Months Ended
	September 26, 2015		September 27, 2014
	(Thousands)
Stock-based compensation by category of expense:
Cost of revenues	$	456	$	330
Research and development	424		332
Selling, general and administrative	944		624
	$	1,824	$	1,286
Stock-based compensation by type of award:
Stock options	$	62	$	142
Restricted stock awards	1,761		1,185
Inventory adjustment to cost of revenues	1		(41		)
	$	1,824	$	1,286

As of September 26, 2015 and June 27, 2015, we had capitalized approximately $0.5 million and $0.5 million, respectively, of stock-based compensation as inventory.

As of September 26, 2015, we had $0.4 million in unrecognized stock-based compensation expense related to unvested stock options, net of estimated forfeitures, that will be recognized over a weighted-average period of 2.5 years, and $11.1 million in unrecognized stock-based compensation expense related to unvested restricted stock awards, net of estimated forfeitures, that will be recognized over a weighted-average period of 1.9 years.

The amount of stock-based compensation expense recognized in any one period related to PSUs can vary based on the achievement or anticipated achievement of the performance conditions. If the performance conditions are not met or not expected be met, no compensation cost would be recognized on the shares underlying the PSUs, and any previously recognized compensation expense related to those PSUs would be reversed.

During the three months ended September 26, 2015, we recorded $0.2 million in stock-based compensation in connection with the PSUs issued in July 2011, March 2014, August 2014 and August 2015. During the three months ended September 27, 2014, we recorded minimal stock-based compensation expense in connection with the PSUs issued in July 2011, March 2014 and August 2014.