The table below summarizes share-based compensation expense recorded in the consolidated statements of operations (in thousands):

	Three Months Ended
	March 29,		March 30,
	2019		2018
Selling, general and administrative	$	2,531	$	1,924
Research and development and engineering		111		84
Cost of revenue		85		36
Total share-based compensation expense	$	2,727	$	2,044

Share-based compensation reported in selling, general and administrative expenses during each of the three-month periods ended March 29, 2019 and March 30, 2018, respectively, included $0.8 million and $0.5 million of expense related to restricted stock units and deferred stock units granted to the members of the Company’s Board of Directors.

The Company’s restricted stock units (“RSUs”) have generally been issued with vesting periods ranging from zero to five years and vest based solely on service conditions. Accordingly, the Company recognizes compensation expense on a straight-line basis over the requisite service period. The Company reduces the compensation expense by an estimated forfeiture rate which is based on anticipated forfeitures and historical forfeiture experience.

Deferred stock units (“DSUs”) are granted to the members of the Company’s Board of Directors. The compensation expense associated with DSUs is recognized in full on the date of grant, as DSUs are fully vested and non-forfeitable upon grant.

The table below summarizes activities relating to RSUs and DSUs issued and outstanding under the Company’s Amended and Restated 2010 Incentive Plan during the three months ended March 29, 2019:

	Shares (In thousands)			Weighted Average Grant Date Fair Value
Unvested at December 31, 2018		529		$	26.98
Granted		101		$	75.29
Vested		(141	)	$	28.33
Forfeited		(8	)	$	34.70
Unvested at March 29, 2019		481		$	36.61
Expected to vest as of March 29, 2019		454

The total fair value of RSUs and DSUs that vested during the three months ended March 29, 2019 was $10.7 million based on the market price of the underlying shares on the date of vesting.

The Company granted two types of performance-based stock awards to certain members of the executive management team: non-GAAP EPS performance-based restricted stock units (“EPS-PSUs”) and relative total shareholder return performance-based restricted stock units (“TSR-PSUs”). Both types of performance-based restricted stock units generally cliff vest on the first day following the end of the three-year performance period.

The number of common shares to be issued upon settlement following vesting of the EPS-PSUs is determined based on the Company’s cumulative non-GAAP EPS over the three-year performance period against the target established by the Company’s Compensation Committee at the time of grant and will be in the range of zero to 200% of the target number of shares. The Company recognizes compensation expense ratably over the performance period based on the number of shares that are deemed probable of vesting at the end of the three-year performance cycle. This probability assessment is performed quarterly and the cumulative effect of a change in the estimated compensation expense, if any, is recognized in the consolidated statement of operations in the period in which such determination is made.

The number of shares to be issued upon settlement following vesting of the TSR-PSUs is determined based on the relative market performance of the Company’s common stock compared to the Russell 2000 Index over the three-year performance period using a payout formula established by the Company’s Board of Directors at the time of grant and will be in the range of zero to 200% of the target number of shares. The Company recognizes the related compensation expense based on the fair value of the TSR-PSUs, determined using the Monte-Carlo valuation model as of the grant date, on a straight-line basis from the grant date to the end of the three-year performance period. Compensation expense will not be affected by the number of TSR-PSUs that will actually vest at the end of the three-year performance period.

The table below summarizes the activities relating to the performance-based awards issued and outstanding under the Company’s Amended and Restated 2010 Incentive Plan during the three months ended March 29, 2019:

	Shares (In thousands)			Weighted Average Grant Date Fair Value
Unvested at December 31, 2018		137		$	37.28
Granted		44		$	92.93
Performance adjustment ⁽¹⁾		29		$	14.13
Vested		(59	)	$	14.13
Forfeited		—		$	—
Unvested at March 29, 2019		151		$	57.57

(1)

Represents adjustment for performance-based awards granted on March 30, 2016. These units vested at 200% during the three months ended March 29, 2019 based on the achievement of cumulative Non-GAAP EPS during the performance period of fiscal years 2016 through 2018.

The total fair value of PSUs that vested during the three months ended March 29, 2019 was $5.0 million based on the market price of the underlying shares on the date of vesting.

The fair value of the TSR-PSUs at the date of grant was estimated using the Monte-Carlo valuation model with the following assumptions:

	Three Months Ended March 29, 2019
Grant-date stock price	$	77.23
Expected volatility		32.54	%
Risk-free interest rate		2.46	%
Expected annual dividend yield		—
Fair value	$	108.58