Stock-Based Compensation

Total stock-based compensation expense included in our Consolidated Statements of Operations is presented in the following table:



	Three Months Ended				Six Months Ended
(In thousands)	June 30, 2018		July 1, 2017		June 30, 2018		July 1, 2017
Cost of products sold	$	196	$	180	$	433	$	408
Research and development	837		1,299		2,044		3,149
Selling, general, and administrative	1,367		1,450		4,723		3,215
Total stock-based compensation	$	2,400	$	2,929	$	7,200	$	6,772

The stock-based compensation expense included in Selling, general, and administrative expense for the first six months of fiscal 2018 includes approximately $1.4 million of additional one-time expense for acceleration of stock compensation under the CEO separation agreement executed with our former CEO during the first quarter of fiscal 2018.

In fiscal years 2015 through 2017, we granted stock options and RSUs with a market condition to certain executives. The options have a two year vesting period and can 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 in the PHLX Semiconductor Sector Index over a two year period. Under the terms of the grants, executives will receive the target amount if the Company’s TSR relative to that of the Index achieves or exceeds the 50^th percentile. Executives may receive 200% if the Company’s TSR exceeds the 75^th percentile. No vesting occurs if the Company’s TSR does not exceed the 25^th percentile. TSR is a measure of stock price appreciation plus dividends paid, if any, in the performance period. The fair values of the options and RSUs were determined and fixed on the date of grant using a lattice-based option-pricing valuation model incorporating a Monte-Carlo simulation and a consideration of the likelihood that we would achieve the market condition.

The following table summarizes the activity for our stock options with a market condition during the first six months of fiscal 2018:



(Shares in thousands)	Unvested		Vested		Total
Balance, December 30, 2017	707		83		790
Vested	(31	)	31		—
Exercised	—		(9	)	(9	)
Canceled	(428	)	(10	)	(438	)
Balance, June 30, 2018	248		95		343

We incurred stock compensation expense related to these market condition awards of $0.2 million and $0.5 million in the second quarter and first six months, respectively, of fiscal 2018 and less than $0.1 million and $0.3 million in the second quarter and first six months, respectively, of fiscal 2017, which is recorded as a component of total stock-based compensation expense.