Stock-Based Compensation

3 Months Ended

Dec. 31, 2022

Stock-Based Compensation

Stock-Based Compensation

Note 13. Stock-Based Compensation

Stock-based compensation expense was recognized as follows:

	Three Months Ended
	December 31,		January 1,
	2022		2022
	(In thousands)
Cost of sales	$	4,242	$	3,783
Selling, general and administrative		7,142		5,135
Research and development		225		114
Total	$	11,609	$	9,032

As of December 31, 2022, an aggregate of 6 million shares of common stock were authorized for future issuance under the Company’s stock plans, of which 4 million of such shares were issuable upon exercise of outstanding options and delivery of shares upon vesting of restricted stock units and 2 million shares of common stock were available for future grant.

Restricted and Performance Stock Units

The Company grants restricted stock units and restricted stock units with performance conditions (“PSUs”) to executive officers, directors and certain other employees. These units vest over periods ranging from one year to four years and/or upon achievement of specified performance criteria, with associated compensation expense recognized ratably over the vesting period.

The Company also grants shares for which vesting is contingent on cumulative non-GAAP earnings per share measured over three fiscal years. If a minimum threshold is not achieved during the measurement period, the shares will be cancelled. If a minimum threshold is achieved or exceeded, the number of shares of common stock that will be issued will range from 70% to 130% of the number of PSUs granted, depending on the extent of performance. Additionally, the number of shares that vest may be adjusted up or down by up to 15% based on the Company’s total shareholder return relative to that of its peer group over this same period.

Activity with respect to the Company’s restricted stock units and PSUs was as follows:

			Weighted-
			Average
		Weighted-	Remaining	Aggregate
		Average Grant Date	Contractual	Intrinsic
	Number of	Fair Value	Term	Value
	Shares	($)	(Years)	($)
	(In thousands)			(In thousands)
Outstanding as of October 1, 2022	3,280	37.11	1.35	155,049
Granted	510	60.21
Vested/Forfeited/Cancelled	(367)	34.53
Outstanding as of December 31, 2022	3,423	40.83	1.42	200,548
Expected to vest as of December 31, 2022	2,998	40.28	1.34	175,594

As of December 31, 2022, unrecognized compensation expense of $86 million is expected to be recognized over a weighted average period of 1.4 years.