Stock-Based Compensation

6 Months Ended

Apr. 01, 2023

Stock-Based Compensation

Stock-Based Compensation

Note 13. Stock-Based Compensation

Stock-based compensation expense was recognized as follows:

	Three Months Ended				Six Months Ended
	April 1,		April 2,		April 1,		April 2,
	2023		2022		2023		2022
	(In thousands)
Cost of sales	$	4,025	$	2,948	$	8,267	$	6,731
Selling, general and administrative		8,304		6,276		15,446		11,411
Research and development		205		106		430		220
Total	$	12,534	$	9,330	$	24,143	$	18,362

During the second quarter of 2023, the Company's stockholders approved the reservation of an additional 1.2 million shares of common stock for future issuance under the Company's 2019 Equity Incentive Plan. As of April 1, 2023, an aggregate of 6 million shares of common stock were authorized for future issuance under the Company’s stock plans, of which 3 million of such shares were issuable upon exercise of outstanding options and delivery of shares upon vesting of restricted stock units and 3 million shares of common stock were available for future grant.

Restricted and Performance Stock Units

The Company grants restricted stock units (“RSUs”) 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’s PSUs vest contingent on achievement of cumulative non-GAAP earnings per share measured over three fiscal years. If a minimum threshold is not achieved during the measurement period, the PSUs will be cancelled. If the 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 RSUs and PSUs was as follows:

			Weighted-
		Weighted-	Average
		Average Grant	Remaining	Aggregate
		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	922	60.07
Vested/Forfeited/Cancelled	(1,199)	35.25
Outstanding as of April 1, 2023	3,003	44.90	1.60	174,278
Expected to vest as of April 1, 2023	2,581	44.33	1.55	149,815

As of April 1, 2023, unrecognized compensation expense of $95 million is expected to be recognized over a weighted average period of 1.6 years.