Share-Based Compensation (Tables)

9 Months Ended

Sep. 27, 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				Nine Months Ended
	September 27, 2014		September 28, 2013		September 27, 2014		September 28, 2013
Cost of sales	$	243	$	140	$	725	$	600
Selling and marketing		612		491		1,681		1,497
Research and development		381		406		1,121		1,190
General and administrative		1,958		1,831		6,777		6,085
Total compensation	$	3,194	$	2,868	$	10,304	$	9,372
Income tax benefit	$	1,077	$	985	$	3,511	$	3,237

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 27, 2014		September 28, 2013
Expected dividend yield		0%		0%
Forfeiture rate		10.32%		10.31%
Volatility		34.92%		32.00%
Risk free interest rate		1.73%		.82%
Range of interest rates		0.02% - 2.61%		0.02% - 1.78%
Expected weighted-average life		5.36 years		5.42 years
Fair value of stock appreciation rights (SARs) granted	$	4,600,000	$	4,443,000
Weighted-average grant date fair value of SARs granted	$	25.00	$	13.83

Summary of Stock Option Activity

Stock option activity was as follows:

	Nine Months Ended September 27, 2014
Options	Shares			Weighted-Average Exercise Price
Outstanding at beginning of year		956,502		$	42.77
Exercised		(355,640	)		44.49
Outstanding at end of period		600,862		$	41.76
Exercisable at end of period		600,862		$	41.76
Intrinsic value of exercised options	$	9,451,000

Summary of Outstanding and Exercisable Options

The following table summarizes information about stock options outstanding at September 27, 2014:

	Outstanding		Exercisable
Aggregate intrinsic value	$	17,481,000	$	17,481,000
Weighted-average remaining contractual term		1.9 years		1.9 years

Summary of SAR Activity

SAR activity was as follows:

	Nine Months Ended September 27, 2014
SARs	Shares			Weighted-Average Exercise Price
Outstanding at beginning of year		1,402,784		$	36.36
Granted		183,932			74.69
Exercised		(245,454	)		33.82
Forfeited		(20,674	)		49.07
Outstanding at end of period		1,320,588		$	41.97
Exercisable at end of period		607,616		$	33.14
Intrinsic value of exercised SARs	$	9,958,000

Summary of Restricted Stock Award Activity

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

	Nine Months Ended September 27, 2014
Restricted Stock Awards	Shares			Weighted-Average Grant Date Fair Value
Outstanding at beginning of year		435,377		$	40.92
Granted		121,132			74.28
Released		(150,618	)		43.16
Forfeited		(8,144	)		52.80
Outstanding at end of period		397,747		$	50.00

Summary of Performance Share Award Activity

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

	Nine Months Ended September 27, 2014
Performance Share Awards	Shares			Weighted-Average Grant Date Fair Value
Outstanding at beginning of year		195,159		$	42.25
Granted		4,323			69.41
Released		(33,535	)		41.45
Forfeited		(20,555	)		41.45
Outstanding at end of period		145,392		$	43.36

Summary of Awards Granted Under Equity-Based Compensation Plans

	As of
	September 27, 2014
Awards granted under Zebra’s equity-based compensation plans:
Unearned compensation costs related to awards granted	$	19,545,000
Period expected to be recognized over		2.2 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 27, 2014			September 28, 2013
Fair market value	$	63.42		$	41.69
Option price	$	60.25		$	39.61
Expected dividend yield		0	%		0	%
Expected volatility		31	%		17	%
Risk free interest rate		0.06	%		0.05	%

Stock Appreciation Rights (SARs) [Member]

Summary of Outstanding and Exercisable Options

The following table summarizes information about SARs outstanding at September 27, 2014:

	Outstanding		Exercisable
Aggregate intrinsic value	$	38,828,000	$	22,910,000
Weighted-average remaining contractual term		7.2 years		6.3 years