Share-Based Compensation (Tables)

3 Months Ended

Mar. 29, 2014

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
	March 29, 2014		March 30, 2013
Cost of sales	$	242	$	184
Selling and marketing		553		465
Research and development		366		325
General and administrative		1,805		1,172
Total compensation	$	2,966	$	2,146
Income tax benefit	$	993	$	730

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:

	Three Months Ended
	March 29, 2014			March 30, 2013
Expected dividend yield		0	%		0	%
Forfeiture rate		10.31	%		10.21	%
Volatility		32.00	%		35.90	%
Risk free interest rate		0.82	%		0.94	%
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	$	85,149		$	82,910
Weighted-average grant date fair value of SARs granted	$	65.75		$	15.08

Summary of Stock Option Activity

Stock option activity was as follows:

	Three Months Ended March 29, 2014
Options	Shares			Weighted-Average Exercise Price
Outstanding at beginning of year		955,777		$	42.78
Granted		0			0.00
Exercised		(116,000	)		44.77
Forfeited		0			0.00
Expired		0			0.00
Outstanding at end of period		839,777		$	42.50
Exercisable at end of period		839,777		$	42.50
Intrinsic value of exercised options	$	2,048,000

Summary of Outstanding and Exercisable Options

The following table summarizes information about stock options outstanding at March 29, 2014:

	Outstanding		Exercisable
Aggregate intrinsic value	$	15,700,000	$	15,700,000
Weighted-average remaining contractual term		2.3 years		2.3 years

Summary of SAR Activity

SAR activity was as follows:

	Three Months Ended March 29, 2014
SARs	Shares			Weighted-Average Exercise Price
Outstanding at beginning of year		1,402,784		$	36.36
Granted		0			0.00
Exercised		(17,584	)		30.30
Forfeited		(5,485	)		41.47
Outstanding at end of period		1,379,715		$	36.41
Exercisable at end of period		507,992		$	30.56
Intrinsic value of exercised SARs	$	648,000

Summary of Restricted Stock Award Activity

Restricted stock award activity granted under the Plans, are as follows:

	Three Months Ended March 29, 2014
Restricted Stock Awards	Shares			Weighted-Average Grant Date Fair  Value
Outstanding at beginning of year		435,377		$	40.92
Granted		1,295			65.75
Released		(6,940	)		38.88
Forfeited		(1,632	)		42.62
Outstanding at end of period		428,100		$	41.03

Summary of Performance Share Award Activity

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

	Three Months Ended March 29, 2014
Performance Share Awards	Shares		Weighted-Average Grant Date Fair  Value
Outstanding at beginning of year		195,159	$	42.25
Granted		0		0.00
Released		0		0.00
Forfeited		0		0.00
Outstanding at end of period		195,159	$	42.25

Summary of Awards Granted Under Equity-Based Compensation Plans

	As of
	March 29, 2014
Awards granted under Zebra’s equity based compensation plans:
Unearned compensation costs related to awards granted	$	14,947,000
Period expected to be recognized over		2.0 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.

	Three Months Ended
	March 29, 2014			March 30, 2013
Fair market value	$	54.08		$	39.31
Option price	$	51.38		$	37.34
Expected dividend yield		0	%		0	%
Expected volatility		33	%		17	%
Risk free interest rate		0.07	%		0.05	%

Stock Appreciation Rights (SARs) [Member]

Summary of Outstanding and Exercisable Options

The following table summarizes information about SARs outstanding at March 29, 2014:

	Outstanding		Exercisable
Aggregate intrinsic value	$	34,193,000	$	15,564,000
Weighted-average remaining contractual term		7.4 years		6.4 years