Stock-Based Compensation

3 Months Ended

Apr. 01, 2017

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 1, 2017		April 2, 2016
Cost of products sold	$	228	$	259
Research and development	1,850		2,459
Selling, general and administrative	1,765		1,838
Total stock-based compensation	$	3,843	$	4,556

We granted stock options with a market condition to certain executives in fiscal years 2015 and 2016. 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. TSR is a measure of stock price appreciation plus dividends paid, if any, in the performance 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.

Of these grants with a market condition, approximately 596,600 were outstanding and unvested at December 31, 2016. During the first quarter of fiscal 2017, approximately 91,500 grants vested, and approximately 183,200 were canceled due to the expiration of the vesting period for the 2015 tranche. A total of approximately 413,400 stock options were outstanding as of April 1, 2017, which includes the approximately 91,500 that vested but were not exercised. We incurred stock compensation expense related to these market condition awards of approximately $0.2 million in the first quarter of fiscal 2017 and approximately $0.1 million in the first quarter of fiscal 2016.