Share-Based Compensation

6 Months Ended

Apr. 03, 2020

Share-based Payment Arrangement [Abstract]

SHARE-BASED COMPENSATION

Stock Plans

As of April 3, 2020, we had 16.9 million shares available for issuance under our 2012 Omnibus Incentive Plan (as Amended and Restated) (the “2012 Plan”) and 3.8 million shares available for issuance under our Employee Stock Purchase Plan. Under the 2012 Plan, we have the ability to issue incentive stock options (“ISOs”), non-statutory stock options (“NSOs”), performance based non-statutory stock options, stock appreciation rights, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”), performance shares and other equity-based awards to employees, directors and outside consultants. The ISOs and NSOs must be granted at a price per share not less than the fair value of our common stock on the date of grant. Options granted to date primarily vest based on certain market-based and performance-based criteria. Options granted generally have a term of four years to seven years. Certain of the share-based awards granted and outstanding as of April 3, 2020 are subject to accelerated vesting upon a change in control of the Company.

Share-Based Compensation

The following table shows a summary of share-based compensation expense included in the condensed consolidated statements of operations (in thousands):



	Three Months Ended				Six Months Ended
	April 3, 2020		March 29, 2019		April 3, 2020		March 29, 2019
Cost of revenue	$	995	$	841	$	1,957	$	1,514
Research and development	4,111		1,200		7,018		4,022
Selling, general and administrative	5,170		6,035		9,451		11,813
Total share-based compensation expense	$	10,276	$	8,076	$	18,426	$	17,349

As of April 3, 2020, the total unrecognized compensation costs related to ISOs, RSAs and RSUs, including awards with time-based and performance-based vesting was $61.1 million, which we expect to recognize over a weighted-average period of 2.4 years. As of April 3, 2020, total unrecognized compensation cost related to our Employee Stock Purchase Plan was $0.2 million.

Stock Options

A summary of stock option activity for the six months ended April 3, 2020 is as follows (in thousands, except per share amounts and contractual term):



	Number of Shares		Weighted-Average Exercise Price per Share		Weighted-Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value
Options outstanding - September 27, 2019	376		$	13.58
Exercised	(18	)	6.73
Forfeited, canceled or expired	—		19.45
Options outstanding - April 3, 2020	358		$	13.93	6.84	$	1,653
Options vested and expected to vest - April 3, 2020	358		13.93		6.84	1,653
Options exercisable - April 3, 2020	73		$	10.55	2.40	$	580

Aggregate intrinsic value represents the difference between our closing stock price on April 3, 2020 and the exercise price of outstanding, in-the-money options. The total intrinsic value of options exercised was $0.3 million for the three and six months ended April 3, 2020 and $0.2 million for the three and six months ended March 29, 2019.

Restricted Stock, Restricted Stock Units and Performance-Based Restricted Stock Units

A summary of RSAs, RSUs and PRSUs activity for the six months ended April 3, 2020 is as follows:



	Number of RSAs, RSUs and PRSUs (in thousands)		Weighted- Average Grate Date Fair Value		Aggregate Intrinsic Value (in thousands)
Balance at September 27, 2019	2,613		$	21.81	$	56,649
Granted	1,177		21.80
Vested and released	(564	)	26.98
Forfeited, canceled or expired	(238	)	23.18
Balance at April 3, 2020	2,988		$	20.72	$	55,333

RSAs, RSUs and PRSUs that vested during the six months ended April 3, 2020 and March 29, 2019 had combined fair values of $16.7 million and $9.6 million, respectively, as of the vesting date.