Stock-Based Compensation

12 Months Ended

Oct. 01, 2022

Stock-Based Compensation.

Stock-Based Compensation

Note 17.  Stock-Based Compensation

Stock-based compensation expense was recognized as follows:

	Year Ended
	October 1,		October 2,		October 3,
	2022		2021		2020
	(In thousands)
Cost of sales	$	14,065	$	14,472	$	10,099
Selling, general and administrative		25,037		20,118		15,897
Research and development		506		386		239
Total	$	39,608	$	34,976	$	26,235

The Company grants restricted stock units and restricted stock units with performance conditions (“PSUs”) to executive officers, directors and certain other employees. These units vest over periods ranging from one year to four years and/or upon achievement of specified performance criteria, with associated compensation expense recognized ratably over the vesting period.

The Company grants shares for which vesting is contingent on cumulative non-GAAP earnings per share measured over three fiscal years. If a minimum threshold is not achieved during the measurement period, the shares will be cancelled. If a minimum threshold is achieved or exceeded, the number of shares of common stock that will be issued will range from 80% to 120% of the number of PSUs granted, depending on the extent of performance. Additionally, the number of shares that vest may be adjusted up or down by up to 15% based on the Company’s total shareholder return relative to that of its peer group over this same period.

Activity with respect to the Company’s restricted stock units and PSUs was as follows:

		Weighted Average	Weighted-Average
		Grant-Date	Remaining	Aggregate
	Number of	Fair Value	Contractual Term	Intrinsic Value
	Shares	($)	(Years)	($)
	(In thousands)			(In thousands)
Outstanding as of September 28, 2019	3,153	27.82	1.30	102,720
Granted	1,340	32.51
Vested/Forfeited/Cancelled	(1,925)	28.62
Outstanding as of October 3, 2020	2,568	29.67	1.23	71,571
Granted	1,529	34.26
Vested/Forfeited/Cancelled	(1,143)	29.27
Outstanding as of October 2, 2021	2,954	32.21	1.23	113,591
Granted	1,644	40.54
Vested/Forfeited/Cancelled	(1,318)	30.42
Outstanding as of October 1, 2022	3,280	37.11	1.35	155,049
Expected to vest as of October 1, 2022	2,909	36.93	1.28	137,524

The fair value of restricted stock units that vested during the year was $44 million for 2022, $32 million for 2021 and $43 million for 2020. As of October 1, 2022, unrecognized compensation expense of $68 million is expected to be recognized over a weighted average period of 1.3 years.