STOCK-BASED COMPENSATION

6 Months Ended

Dec. 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 (assumptions are not applicable for the three and six months ended December 26, 2015, as there were no stock options granted during those periods):



	Three Months Ended		Six Months Ended
	December 26, 2015	December 27, 2014	December 26, 2015	December 27, 2014
Stock options:
Expected life	N/A	5.3 years	N/A	5.3 years
Risk-free interest rate	N/A	1.6%	N/A	1.6	%
Volatility	N/A	76.0%	N/A	76.9	%
Dividend yield	N/A	—	N/A	—

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



	Three Months Ended					Six Months Ended
	December 26, 2015			December 27, 2014		December 26, 2015			December 27, 2014
	(Thousands)
Stock-based compensation by category of expense:
Cost of revenues	$	472		$	576	$	928		$	906
Research and development	491			410		915			742
Selling, general and administrative	1,580			770		2,524			1,394
	$	2,543		$	1,756	$	4,367		$	3,042
Stock-based compensation by type of award:
Stock options	$	53		$	88	$	115		$	230
Restricted stock awards	2,535			1,551		4,296			2,736
Inventory adjustment to cost of revenues	(45		)	117		(44		)	76
	$	2,543		$	1,756	$	4,367		$	3,042

As of December 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 December 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 2.3 years, and $8.4 million in unrecognized stock-based compensation expense related to unvested time-based restricted stock awards, net of estimated forfeitures, that will be recognized over a weighted-average period of 1.8 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 and six months ended December 26, 2015, we recorded $0.8 million and $1.0 million, respectively, in stock-based compensation in connection with the PSUs issued in July 2011, March 2014, August 2014 and August 2015, including approximately $0.5 million related to the acceleration of the stock-based compensation in connection with the PSUs issued in August 2014 upon the achievement of the performance conditions. During the three and six months ended December 27, 2014, we recorded minimal stock-based compensation expense in connection with the PSUs issued in July 2011, March 2014 and August 2014.