XML 30 R19.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Stock-Based Compensation Expense | 9 Months Ended
--- | ---
Oct. 01, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Stock-Based Compensation Expense | Stock-Based Compensation Expense The Company’s share-based payments that result in compensation expense consist of stock option grants and restricted stock awards. As of October 1, 2017, the Company had 6,183,376 shares available for grant. Stock options are granted with an exercise price equal to the market value of the Company’s common stock at the grant date and generally vest over four years based upon continuous service and expire ten years from the grant date. Restricted stock awards are granted with an exercise price equal to the market value of the Company's common stock at the time of grant. Conditions of the award may be based on continuing employment and/or achievement of pre-established performance goals and objectives. Vesting for performance-based restricted stock awards and time-based restricted stock awards must generally be at least one year and three years, respectively, but vesting may occur incrementally over the three-year period. The following table summarizes the Company’s stock option activity for the nine-month period ended October 1, 2017:
| Shares (in thousands) |  | Weighted- Average Exercise Price |  | Weighted- Average Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2016 | 6,433 |  |  | $ | 32.16 |  |  |  |  |
Granted | 1,980 |  |  | 77.87 |  |  |  |  |
Exercised | (1,731 | ) |  | 25.85 |  |  |  |  |
Forfeited or expired | (84 | ) |  | 45.57 |  |  |  |  |
Outstanding as of October 1, 2017 | 6,598 |  |  | $ | 47.36 |  |  | 7.77 |  | $ | 415,030 |
Exercisable as of October 1, 2017 | 1,707 |  |  | $ | 27.96 |  |  | 5.68 |  | $ | 140,559 |
Options vested or expected to vest as of October 1, 2017 (1) | 5,795 |  |  | $ | 45.86 |  |  | 7.63 |  | $ | 373,276 |
(1) In addition to the vested options, the Company expects a portion of the unvested options to vest at some point in the future. Options expected to vest are calculated by applying an estimated forfeiture rate to the unvested options. The fair values of stock options granted in each period presented were estimated using the following weighted-average assumptions:
| Three-months Ended |  | Nine-months Ended
| October 1, 2017 |  | October 2, 2016 |  | October 1, 2017 |  | October 2, 2016
Risk-free rate | 2.4 | % |  | 1.7 | % |  | 2.4 | % |  | 1.7 | %
Expected dividend yield | 0.39 | % |  | 0.84 | % |  | 0.39 | % |  | 0.84 | %
Expected volatility | 41 | % |  | 41 | % |  | 41 | % |  | 41 | %
Expected term (in years) | 5.1 |  |  | 5.5 |  |  | 5.3 |  |  | 5.5 |
Risk-free rate The risk-free rate was based upon a treasury instrument whose term was consistent with the contractual term of the option. Expected dividend yield Generally, the current dividend yield is calculated by annualizing the cash dividend declared by the Company’s Board of Directors and dividing that result by the closing stock price on the grant date. Expected volatility The expected volatility was based upon a combination of historical volatility of the Company’s common stock over the contractual term of the option and implied volatility for traded options of the Company’s stock. Expected term The expected term was derived from the binomial lattice model from the impact of events that trigger exercises over time. The Company stratifies its employee population into two groups: one consisting of senior management and another consisting of all other employees. The Company currently expects that approximately 75% of its stock options granted to senior management and 72% of its options granted to all other employees will actually vest. Therefore, the Company currently applies an estimated annual forfeiture rate of 10% to all unvested options for senior management and a rate of 12% for all other employees. The Company revised its estimated forfeiture rate in the first quarter of 2017, resulting in a decrease to compensation expense of $673,000. The Company also revised its estimated forfeiture rate in the first quarter of 2016, resulting in an increase to compensation expense of $334,000. The weighted-average grant-date fair values of stock options granted during the three-month periods ended October 1, 2017 and October 2, 2016 were $29.59 and $12.34, respectively. The weighted-average grant-date fair values of stock options granted during the nine-month periods ended October 1, 2017 and October 2, 2016 were $29.94 and $12.25, respectively. The total intrinsic values of stock options exercised for the three-month periods ended October 1, 2017 and October 2, 2016 were $28,462,000 and $23,139,000, respectively. The total intrinsic values of stock options exercised for the nine-month periods ended October 1, 2017 and October 2, 2016 were $100,913,000 and $32,514,000, respectively. The total fair values of stock options vested for the three-month periods ended October 1, 2017 and October 2, 2016 were $844,000 and $679,000, respectively. The total fair values of stock options vested for the nine-month periods ended October 1, 2017 and October 2, 2016 were $19,557,000 and $16,724,000, respectively. As of October 1, 2017, total unrecognized compensation expense related to non-vested stock options was $41,354,000, which is expected to be recognized over a weighted-average period of 1.67 years. The following table summarizes the Company's restricted stock activity for the nine-month period ended October 1, 2017:
| Shares (in thousands) |  | Weighted-Average Grant Fair Value |  | Aggregate Intrinsic Value (in thousands)(1)
Nonvested as of December 31, 2016 | 20 |  |  | $ | 34.05 |  |  |
Granted | — |  |  | — |  |  |
Vested | (10 | ) |  | 34.05 |  |  | 825 |
Forfeited or expired | — |  |  | — |  |  |
Nonvested as of October 1, 2017 | 10 |  |  | $ | 34.05 |  |  | $ | 1,103 |
(1) Fair market value as of April 22, 2017 for vested shares, and as of October 1, 2017 for nonvested shares. The fair values of restricted stock awards granted were determined based upon the market value of the Company's common stock at the time of grant. The initial cost is then amortized over the period of vesting until the restrictions lapse. These restricted shares will be fully vested in 2018. Participants are entitled to dividends on restricted stock awards, but only receive those amounts if the shares vest. The sale or transfer of these shares is restricted during the vesting period. The total stock-based compensation expense and the related income tax benefit recognized for the three-month period ended October 1, 2017 were $8,026,000 and $2,639,000, respectively, and for the three-month period ended October 2, 2016 were $4,622,000 and $1,520,000, respectively. The total stock-based compensation expense and the related income tax benefit recognized for the nine-month period ended October 1, 2017 were $23,355,000 and $7,661,000, respectively, and for the nine-month period ended October 2, 2016 were $15,883,000 and $5,210,000, respectively. No compensation expense was capitalized as of October 1, 2017 or December 31, 2016. The following table presents the stock-based compensation expense by caption for each period presented on the Consolidated Statements of Operations (in thousands):
| Three-months Ended |  | Nine-months Ended
| October 1, 2017 |  | October 2, 2016 |  | October 1, 2017 |  | October 2, 2016
Cost of revenue | $ | 520 |  |  | $ | 273 |  |  | $ | 1,404 |  |  | $ | 795 |
Research, development, and engineering | 2,765 |  |  | 1,366 |  |  | 8,090 |  |  | 4,942 |
Selling, general, and administrative | 4,741 |  |  | 2,983 |  |  | 13,861 |  |  | 10,146 |
| $ | 8,026 |  |  | $ | 4,622 |  |  | $ | 23,355 |  |  | $ | 15,883 |

X
- Definition The entire disclosure for compensation costs, including compensated absences accruals, compensated absences liability, deferred compensation arrangements and income statement compensation items. Deferred compensation arrangements may include a description of an arrangement with an individual employee, which is generally an employment contract between the entity and a selected officer or key employee containing a promise by the employer to pay certain amounts at designated future dates, usually including a period after retirement, upon compliance with stipulated requirements. This type of arrangement is distinguished from broader based employee benefit plans as it is usually tailored to the employee. Disclosure also typically includes the amount of related compensation expense recognized during the reporting period, the number of shares (units) issued during the period under such arrangements, and the carrying amount as of the balance sheet date of the related liability. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 70 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=49170846&loc=d3e28014-114942 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 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=65897934&loc=d3e1928-114920 Reference 4: 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 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 14.F) -URI http://asc.fasb.org/extlink&oid=27013229&loc=d3e301413-122809 + Details
Name: | us-gaap_CompensationRelatedCostsGeneralTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration