Stock-Based Compensation

3 Months Ended

Oct. 03, 2020

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Note 16. Stock-Based Compensation

Overview

The impact on the Company’s results of operations of recording stock-based compensation by function for the three months ended October 3, 2020 and September 28, 2019, as follows (in millions):

	Three Months Ended
	October 3, 2020		September 28, 2019
Cost of revenues	$	1.2	$	1.0
Research and development	2.2		1.7
Selling, general and administrative	9.1		7.6
Total stock-based compensation expense	$	12.5	$	10.3

Approximately $1.2 million and $1.0 million of stock-based compensation expense was capitalized to inventory as of October 3, 2020 and September 28, 2019, respectively.

Full Value Awards

Full Value Awards refer to restricted stock units that are granted without an exercise price and are converted to shares immediately upon vesting. Performance-based awards are performance-based with market conditions, performance conditions, time-based or a combination, and are expected to vest over one to four years. When converted into shares upon vesting, shares equivalent in value to the minimum withholding taxes liability on the vested shares are withheld by the Company for the payment of such taxes.

During the three months ended October 3, 2020 and September 28, 2019, the Company granted 2.5 million and 2.9 million time-based awards, respectively. The fair value of the time-based Full Value Awards is based on the closing market price of the Company’s common stock on the date of award. These time-based awards granted to eligible employees generally vest in annual or quarterly installments over a period of three years, are subject to the employees’ continuing service to the Company and do not have an expiration date.

During the three months ended October 3, 2020 and September 28, 2019, the Company granted 0.6 million and 0.5 million, performance-based awards, respectively. These performance-based shares represent the target amount of grants, and the actual number of shares awarded upon vesting may vary depending upon the achievement of the relevant performance conditions. The shares attained over target upon vesting are reflected as awards granted during the period. Accordingly, during the three months ended October 3, 2020 and September 28, 2019, the Company granted an additional 0.1 million and 0.1 million shares due to performance-based shares attained over target. The aggregate grant-date fair value of performance-based awards granted during the three months ended October 3, 2020 and September 28, 2019 were estimated to be $8.9 million and $6.2 million, respectively. The majority of performance-based awards vest in equal annual installments over three years based on the attainment of certain performance

measures and the employee’s continued service through the vest date. The performance-based awards with market conditions were valued using a Monte Carlo simulation.

As of October 3, 2020, $75.5 million of unrecognized stock-based compensation cost related to Full Value Awards remains to be amortized.