Stock-Based Compensation

3 Months Ended

Apr. 02, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Total stock-based compensation expense included in our Consolidated Statements of Operations was as follows:



	Three Months Ended
(In thousands)	April 2, 2016		April 4, 2015
Line item:
Cost of products sold	$	259	$	240
Research and development	2,459		1,509
Selling, general and administrative	1,838		1,635
Acquisition related charges	—		3,891
Total stock-based compensation	$	4,556	$	7,275

Of the $7.3 million total stock-based compensation for the three months ended April 4, 2015, $1.7 million was cashed out during the first quarter 2015 and $2.2 million was accrued in accrued payroll obligations on the Consolidated Balance Sheets as of April 4, 2015, and paid out in the second quarter of 2015.

During the first and second quarters of fiscal 2015, we granted approximately 327,200 stock options and 70,000 RSUs with a market condition to certain executives. Since then, there have been no new grants with market conditions. The options and RSUs have a two year vesting and vest between 0% and 200% of the target amount, based on the Company's relative Total Shareholder Return (TSR) when compared to the TSR of a component of companies of the PHLX Semiconductor Sector Index over a two year period. The fair values of the options were determined and fixed on the date of grant using a lattice-based option-pricing valuation model, which incorporates a Monte-Carlo simulation, and considered the likelihood that we would achieve the market condition. TSR is a measure of stock price appreciation plus dividends paid, if any, in the performance period. As of April 2, 2016, approximately 296,300 stock options and 70,000 RSUs with market conditions were outstanding. In the first quarter of fiscal 2016, we incurred stock compensation expense of less than $0.1 million related to these market condition awards.