Stock-Based Compensation

3 Months Ended

Apr. 02, 2016

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)	April 2, 2016		April 4, 2015
Cost of sales	$	187	$	227
Research, development, and engineering	801		860
Selling, general and administrative expenses	2,491		3,304
Total stock-based compensation expense	$	3,479	$	4,391

Stock-based compensation cost capitalized as part of inventory during the three month periods ended April 2, 2016 and April 4, 2015 was $0.1 million and $0.2 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 April 2, 2016, there was $29.6 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 2.88 years.

The 1993 Plan provides for the grant of stock-based awards to our eligible employees, consultants and advisers and non-employee directors. As of April 2, 2016, there were 0.4 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
	April 2, 2016	April 4, 2015
Expected life (in years)	5.9	5.9
Risk-free interest rate	1.7%	1.6%
Volatility	43%	44%
Dividend yield	—%	—%

Our equity awards granted during the three month period ended April 2, 2016 and the corresponding periods of 2015 were granted with vesting terms of 50 months.