Stock-Based Compensation

3 Months Ended

Mar. 24, 2013

Stock-Based Compensation [Abstract]

Stock-Based Compensation

10. Stock‑Based Compensation

The Company issues new shares to fulfill the obligations under all of its stock‑based compensation awards.  Such shares are subject to registration under applicable securities laws, including the rules and regulations promulgated by the Securities and Exchange Commission, unless an applicable exemption applies.

During the nine months ended March 24, 2013, the Company granted an aggregate of 111,000 stock options to Company employees under its 2011 Performance Incentive Plan (the "2011 Plan").  Subject to the terms and conditions of the 2011 Plan and applicable award documentation, such awards generally vest and become exercisable in equal installments over each of the first three anniversaries of the date of grant, with a maximum award term of five years.

The following table summarizes the stock option activities for the nine months ended March 24, 2013 (in thousands, except per share price data):

	Stock Option Shares			Weighted AverageOption ExercisePrice per Share		Weighted AverageGrant DateFair Value per Share		AggregateIntrinsic Value
Outstanding, June 24, 2012		2,044		$	16.76		—	$	7,031
Granted		111		$	19.89	$	5.56		—
Exercised		(294	)	$	19.69		—	$	1,447
Expired or forfeited		(34	)	$	18.41		—		—
Outstanding, March 24, 2013		1,827		$	17.24		—	$	7,209

For the nine months ended March 24, 2013 and March 25, 2012, the Company received $4.3 million and $2.4 million, respectively, for stock options exercised.  There were no tax benefits realized from issuance of stock-based awards for the three and nine months ended March 24, 2013 and March 25, 2012, respectively.

During the nine months ended March 24, 2013, the Company granted 48,300 restricted stock units ("RSUs") to employees, and 61,227 RSUs to members of the Board of Directors, in each case under the 2011 Plan.  The awards provided for vesting over a period of service, subject to the terms and conditions of the 2011 Plan and applicable award documentation.  For the awards made to employees, the vesting of awards generally takes place in equal installments over each of the first three anniversaries of the date of grant.  The awards made to members of the Board of Directors were made as part of the Board's annual director compensation program, under which the vesting of awards takes place generally on the first anniversary of the date of grant.

The following table summarizes the RSU activity for the nine months ended March 24, 2013 (in thousands, except per share price data):

	RestrictedStockUnits			Weighted AverageGrant DateFair Value per Share		AggregateIntrinsic Value
Outstanding, June 24, 2012		2,905		$	21.72	$	57,932
Granted		110		$	18.23		—
Vested		(267	)	$	19.66	$	5,024
Forfeited		(307	)	$	20.38		—
Outstanding, March 24, 2013		2,441		$	21.93	$	51,181

The Company's stock based compensation plans and award documentation permit the reduction of a grantee's RSUs for purposes of settling a grantee's income tax obligation.  During the nine months ended March 24, 2013, the Company withheld RSUs representing 77,222 underlying shares to fund grantees' income tax obligations.

10. Stock‑Based Compensation (Continued)

Additional information relating to the Company's stock based compensation plans, including employee stock options and RSUs (including RSUs with performance based and market-based vesting criteria) at March 24, 2013 and June 24, 2012 is as follows (in thousands):

	March 24, 2013		June 24, 2012
Outstanding options exercisable		1,666		1,749
Options and RSUs available for grant		8,724		8,505
Total reserved common stock shares for stock option plans		12,992		13,454

For the three and nine months ended March 24, 2013 and March 25, 2012, stock‑based compensation expense associated with the Company's stock options and RSUs (including RSUs with performance-based vesting and market-based vesting criteria) was as follows (in thousands):

	Three Months Ended				Nine Months Ended
	March 24, 2013		March 25, 2012		March 24, 2013		March 25, 2012
Selling, general and administrative expense	$	2,693	$	2,166	$	8,711	$	7,097
Research and development expense		1,583		1,155		4,401		3,054
Cost of sales		1,021		819		3,302		1,958
Total stock‑based compensation expense	$	5,297	$	4,140	$	16,414	$	12,109

During the nine months ended March 25, 2012, and included in the above table, the Company recorded a net credit of $1.3 million to stock compensation expense relating to performance based awards, based on the determination that the achievement of certain of the performance goals that the Company in the prior year had determined were probable to be achieved were no longer considered probable.

The total unrecognized compensation expense for outstanding stock options and RSUs was $28.5 million as of March 24, 2013.  The unrecognized compensation expense for the outstanding stock options and RSUs will generally be recognized over three years.  The weighted average number of years to recognize the total compensation expense for stock options and RSUs are 2.4 years and 1.8 years, respectively.  As of March 24, 2013, the Company had no RSUs with performance (non-market) based vesting conditions outstanding.

The fair value of the Company stock options issued during the nine months ended March 24, 2013 and March 25, 2012, was determined at the grant date using the Black‑Scholes option pricing model with the following weighted average assumptions:

	Nine Months Ended
	March 24, 2013			March 25, 2012
Expected life	3.5 years			3.5 years
Risk free interest rate		0.40	%		0.37	%
Volatility		37.57	%		46.3	%
Dividend yield		0.0	%		0.0	%