Stock-Based Compensation

3 Months Ended

Apr. 04, 2015

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

Stock-Based Compensation

Stock-Based Compensation:

Total stock-based compensation expense included in our Consolidated Statements of Operations was as follows: 

	Three Months Ended
(In thousands)	April 4, 2015		March 29, 2014
Line item:
Cost of products sold	$	240	$	166
Research and development	1,509		1,034
Selling, general and administrative	1,635		1,890
Acquisition related charges	3,891		$	—
Total stock-based compensation	$	7,275	$	3,090

During the first quarter of 2015, we granted approximately 306,000 stock options with a market condition to certain executives. The options have a two year vesting and vest between 0% and 200% of the target amount, based on the Company's relative Total Shareholder Return (TSR) when compared to the TSR of a component of companies of the PHLX Semiconductor Sector Index over a two year period. The fair values of the options were determined and fixed on the date of grant using a lattice-based option-pricing valuation model, which incorporates a Monte-Carlo simulation, and considered the likelihood that we would achieve the market condition. TSR is a measure of stock price appreciation plus dividends paid, if any, in the performance period. As of April 4, 2015, 306,000 market-based stock options were outstanding. In the first quarter of 2015, we incurred stock compensation expense of $0.1 million related to these market condition awards.

Total stock-based compensation for the first quarter 2015 was $7.3 million, of which $1.7 million was cashed out during the first quarter 2015 and $2.2 million was accrued in Accrued payroll obligations on the Consolidated Balance Sheets as of the end of the first quarter 2015, to be paid out subsequent to quarter-end.