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Equity-Based Compensation | 3 Months Ended
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Apr. 04, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Equity-Based Compensation | Note 16 – Equity-Based Compensation Zebra has an equity-based compensation plan and an employee stock purchase plan under which shares of our common stock were available for future grants and sales. Zebra recognizes compensation costs using the straight-line method over the vesting period upon grant of up to 5 years. Pre-tax equity-based compensation expense recognized in income was $8.8 million and $3.0 million for the three month periods ending April 4, 2015 and March 29, 2014, respectively. Tax related benefits of $3.1 million and $1.0 million were also recognized for the three month periods ending April 4, 2015 and March 29, 2014, respectively. The company issued 175,261 and 123,019 shares in connection with stock based compensation and employee stock purchase programs during the three months ended April 4, 2015 and March 29, 2014 respectively. The fair value of equity-based compensation is estimated on the date of grant using a binomial model. Volatility is based on an average of the implied volatility in the open market and the annualized volatility of Zebra stock prices over our entire stock history. Stock option grants in the table below include both stock options, all of which were non-qualified, and stock appreciation rights (SARs) that will be settled in Zebra stock. Restricted stock grants are valued at the market closing price on the grant date. 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 |
|  | April 4, 2015 |  |  | March 29, 2014 |
Expected dividend yield |  |  | 0 | % |  |  | 0 | %
Forfeiture rate |  |  | 10.32 | % |  |  | 10.31 | %
Volatility |  |  | 34.92 | % |  |  | 32.00 | %
Risk free interest rate |  |  | 1.73 | % |  |  | 0.82 | %
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 SARs granted |  | $ | 70,234 |  |  | $ | 85,149 |
Weighted-average grant date fair value of SARs granted (per underlying share) |  | $ | 28.82 |  |  | $ | 65.75 |
Stock option activity was as follows:
|  | Three Months Ended April 4, 2015 |  |  |  |  |  |  |
Options |  | Shares |  |  | Weighted-Average Exercise Price |  |  | Weighted-Average remaining contractual term |  |  | Aggregate Intrinsic Value |
Outstanding at beginning of year |  |  | 415,960 |  |  | $ | 40.19 |  |  |  |  |  |  |  |  |
Exercised |  |  | (133,981 | ) |  |  | 44.36 |  |  |  |  |  |  |  |  |
Expired |  |  | (1,550 | ) |  |  | 51.62 |  |  |  |  |  |  |  |  |
Outstanding at end of period |  |  | 280,429 |  |  | $ | 38.13 |  |  |  | 2.5 Years |  |  | $ | 13.6 million |
Exercisable at end of period |  |  | 280,429 |  |  | $ | 38.13 |  |  |  | 2.5 Years |  |  | $ | 13.6 million |
Intrinsic value of exercised options |  | $ | 5,709,000 |  |  |  |  |  |  |  |  |  |  |  |  |
SARs activity was as follows:
|  | Three Months Ended April 4, 2015 |  |  |  |  |  |  |
SARs |  | Shares |  |  | Weighted-Average Exercise Price |  |  | Weighted-Average remaining contractual term |  |  | Aggregate Intrinsic Value |
Outstanding at beginning of year |  |  | 1,292,142 |  |  | $ | 42.20 |  |  |  |  |  |  |  |  |
Granted |  |  | 2,437 |  |  |  | 85.82 |  |  |  |  |  |  |  |  |
Exercised |  |  | (32,159 | ) |  |  | 34.34 |  |  |  |  |  |  |  |  |
Forfeited |  |  | (3,569 | ) |  |  | 50.62 |  |  |  |  |  |  |  |  |
Outstanding at end of period |  |  | 1,258,851 |  |  | $ | 42.46 |  |  |  | 6.8 years |  |  | $ | 55.6 million |
Exercisable at end of period |  |  | 556,517 |  |  | $ | 32.99 |  |  |  | 5.8 years |  |  | $ | 29.9 million |
Intrinsic value of exercised SARs |  | $ | 1,688,000 |  |  |  |  |  |  |  |  |  |  |  |  |
Restricted stock award activity was as follows:
|  | Three Months Ended April 4, 2015 |
Restricted Stock Awards |  | Shares |  |  | Weighted-Average Grant Date Fair Value |
Outstanding at beginning of year |  |  | 691,621 |  |  | $ | 60.06 |
Granted |  |  | 2,053 |  |  |  | 85.82 |
Released |  |  | (4,239 | ) |  |  | 42.56 |
Forfeited |  |  | (12,437 | ) |  |  | 71.82 |
Outstanding at end of period |  |  | 676,998 |  |  | $ | 60.06 |
Performance share award activity was as follows:
|  | Three Months Ended April 4, 2015 |
Performance Share Awards |  | Shares |  |  | Weighted-Average Grant Date Fair Value |
Outstanding at beginning of year |  |  | 374,180 |  |  | $ | 61.53 |
Released |  |  | 1,703 |  |  |  | 85.82 |
Forfeited |  |  | (3,530 | ) |  |  | 73.07 |
Outstanding at end of period |  |  | 372,353 |  |  | $ | 61.53 |
Restricted stock unit activity was as follows:
|  | Three Months Ended April 4, 2015 |
Restricted Stock Units |  | Shares |
Outstanding at beginning of year |  |  | 41,964 |
Released |  |  | (34 | )
Forfeited |  |  | (1,305 | )
Outstanding at end of period |  |  | 40,625 |
Performance stock unit activity was as follows:
|  | Three Months Ended April 4, 2015 |
Performance Stock Units |  | Shares |
Outstanding at beginning of year |  |  | 10,345 |
Forfeited |  |  | (680 | )
Outstanding at end of period |  |  | 9,665 |
As of April 4, 2015 total unearned compensation costs related to Zebra’s equity based compensation plans was $45.7 million which will be amortized over the weighted average remaining service period of 1.7 years. The fair value of the purchase rights issued to Zebra employees 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 |
|  | April 4, 2015 |  |  | March 29, 2014 |
Fair market value |  | $ | 77.41 |  |  | $ | 54.08 |
Option price |  | $ | 73.54 |  |  | $ | 51.38 |
Expected dividend yield |  |  | 0 | % |  |  | 0 | %
Expected volatility |  |  | 23 | % |  |  | 33 | %
Risk free interest rate |  |  | 0.04 | % |  |  | 0.07 | %

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- Definition Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 + Details
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