Stock-Based Compensation

3 Months Ended

Mar. 29, 2014

Share-based Compensation [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Stock-based compensation expense recognized under ASC Topic 718, Compensation – Stock Compensation (“ASC 718”), for employees and directors and the effect on our Condensed Consolidated Statements of Operations were as follows:

	Three Months Ended
(In thousands)	March 29, 2014		March 30, 2013
Cost of sales	$	190	$	174
Research, development, and engineering	639		542
Selling, general and administrative expenses	3,133		2,545
Total stock-based compensation expense	$	3,962	$	3,261

Stock-based compensation cost capitalized as part of inventory during the three month period ended March 29, 2014 and the corresponding period of 2013 was $0.2 million and $0.1 million, respectively.

As required by ASC 718, we estimate expected forfeitures and recognize compensation costs only for those equity awards expected to vest. As of March 29, 2014, there was $51.1 million of total unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under our 1993 Stock Option Plan/Stock Issuance Plan, as amended (the “1993 Plan”). The costs related to stock options and restricted stock units are expected to be recognized over a weighted average period of 4.5 years and 4.1 years, respectively.

The 1993 Plan provides for the grant of stock-based awards to our eligible employees, consultants and advisers and non-employee directors. As of March 29, 2014, there were 1.0 million shares reserved for future awards under the 1993 Plan.

We used the following weighted-average assumptions to estimate the fair value of our stock options granted:

	Three Months Ended
	March 29, 2014	March 30, 2013
Expected life (in years)	5.9	5.9
Risk-free interest rate	1.4%	0.9%
Volatility	47%	47%
Dividend yield	—%	—%

Our stock options granted during the three month periods ended March 29, 2014 were granted with vesting terms of 50 months.