Share-Based Compensation (Tables)

9 Months Ended

Sep. 28, 2013

Compensation Expense and Related Tax Benefit for Equity-Based Payments

The compensation expense and the related tax benefit for share-based payments were included in the Consolidated Statement of Earnings as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 28, 2013		September 29, 2012		September 28, 2013		September 29, 2012
Cost of sales	$	140	$	287	$	600	$	820
Selling and marketing		491		511		1,497		1,271
Research and development		406		374		1,190		1,196
General and administrative		1,831		2,268		6,085		8,198
Total compensation	$	2,868	$	3,440	$	9,372	$	11,485
Income tax benefit	$	985	$	1,217	$	3,237	$	4,003

Weighted-Average Assumptions Used for Grants of Stock Options and SARs

The following table shows the weighted-average assumptions used for grants of SARs as well as the fair value of the grants based on those assumptions:

	Nine Months Ended
	September 28, 2013			September 29, 2012
Expected dividend yield		0	%		0	%
Forfeiture rate		10.31	%		10.21	%
Volatility		32.00	%		35.90	%
Risk free interest rate		.82	%		.94	%
Range of interest rates		0.02% - 1.78	%		0.07% - 1.95	%
Expected weighted-average life		5.42 years			5.48 years
Fair value of stock appreciation rights (SARs) granted	$	4,443,000		$	5,507,000
Weighted-average grant date fair value of SARs granted	$	13.83		$	12.84

Summary of Stock Option Activity

Stock option activity was as follows:

	Nine Months Ended September 28, 2013
Options	Shares			Weighted-Average Exercise Price
Outstanding at beginning of year		1,531,844		$	41.69
Exercised		(371,775	)		37.74
Expired		(20,145	)		47.37
Outstanding at end of period		1,139,924		$	42.88
Exercisable at end of period		1,139,924		$	42.88
Intrinsic value of exercised options	$	2,909,000

Summary of Outstanding and Exercisable Options

The following table summarizes information about stock options outstanding at September 28, 2013:

	Outstanding		Exercisable
Aggregate intrinsic value	$	3,941,000	$	3,941,000
Weighted-average remaining contractual term		2.5 years		2.5 years

Summary of SAR Activity

SAR activity was as follows:

	Nine Months Ended September 28, 2013
SARs	Shares			Weighted-Average Exercise Price
Outstanding at beginning of year		1,535,804		$	31.66
Granted		321,222			46.05
Exercised		(351,869	)		24.98
Forfeited		(71,734	)		36.96
Expired		(2,643	)		33.70
Outstanding at end of period		1,430,780		$	36.26
Exercisable at end of period		544,300		$	30.58
Intrinsic value of exercised SARs	$	7,422,000

Summary of Restricted Stock Award Activity

Time vested restricted stock award activity was as follows:

	Nine Months Ended September 28, 2013
Restricted Stock Awards	Shares			Weighted-Average Grant Date Fair  Value
Outstanding at beginning of year		444,362		$	35.43
Granted		163,989			46.07
Released		(158,108	)		30.92
Forfeited		(12,794	)		40.07
Outstanding at end of period		437,449		$	40.91

Summary of Performance Share Award Activity

Performance share award activity granted under the Plans, are as follows:

	Nine Months Ended September 28, 2013
Performance Share Awards	Shares			Weighted-Average Grant Date Fair  Value
Outstanding at beginning of year		265,829		$	33.55
Granted		187,794			35.17
Released		(253,484	)		27.90
Forfeited		(4,980	)		41.46
Outstanding at end of period		195,159		$	42.25

Summary of Awards Granted Under Equity-Based Compensation Plans

	As of
	September 28, 2013
Awards granted under Zebra’s equity-based compensation plans:
Unearned compensation costs related to awards granted	$	20,064,000
Period expected to be recognized over		2.5 years

Weighted-Average Assumptions Used for Employee Purchase Rights Granted Under Stock Purchase Plan

The fair value of the purchase rights issued under the stock purchase plan is estimated using the following weighted-average assumptions for purchase rights granted. Expected lives of three months to one year have been used along with these assumptions.

	Nine Months Ended
	September 28, 2013			September 29, 2012
Fair market value	$	41.69		$	34.93
Option price	$	39.61		$	33.18
Expected dividend yield		0	%		0	%
Expected volatility		17	%		21	%
Risk free interest rate		0.05	%		0.06	%

Stock Appreciation Rights (SARs) [Member]

Summary of Outstanding and Exercisable Options

The following table summarizes information about SARs outstanding at September 28, 2013:

	Outstanding		Exercisable
Aggregate intrinsic value	$	13,024,000	$	7,943,000
Weighted-average remaining contractual term		7.8 years		6.9 years