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Share-Based Compensation | 6 Months Ended
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Jul. 26, 2020
Share-based Payment Arrangement, Noncash Expense [Abstract] |
Share-Based Compensation | Share-Based Compensation Financial Statement Effects and Presentation Pre-tax share-based compensation was included in the Statements of Income as follows:
| Three Months Ended |  |  |  | Six Months Ended |  |
(in thousands) | July 26, 2020 |  | July 28, 2019 |  | July 26, 2020 |  | July 28, 2019
Cost of sales | $ | 550 |  |  | $ | 402 |  |  | $ | 1,080 |  |  | $ | 829 |
Selling, general and administrative | 9,501 |  |  | 9,532 |  |  | 15,460 |  |  | 18,471 |
Product development and engineering | 3,135 |  |  | 2,491 |  |  | 6,025 |  |  | 5,103 |
Total share-based compensation | $ | 13,186 |  |  | $ | 12,425 |  |  | $ | 22,565 |  |  | $ | 24,403 |
Total Stockholder Return ("TSR") Market-Condition Restricted Stock Units The Company grants TSR market-condition restricted stock units (the "TSR Awards") to certain executives of the Company. The TSR Awards have a pre-defined market-condition, which determines the number of shares that ultimately vest, as well as a service condition. The TSR Awards are valued as of the measurement date using a Monte Carlo simulation which takes into consideration the possible outcomes pertaining to the TSR market condition and expense is recognized on a straight line basis over the vesting periods and is adjusted for any actual forfeitures. In the six months ended July 26, 2020, the Company granted 137,224 TSR Awards, which are accounted for as equity awards. The market condition is determined based upon the Company’s TSR benchmarked against the TSR of the S&P SPDR Semiconductor ETF (NYSE:XSD) over a one, two and three year period (one-third of the awards vesting each performance period). Generally, the fiscal year 2021 award recipients must be employed for the entire performance period and be an active employee at the time of vesting of the awards. The grant-date fair value per unit of the awards granted in the six months ended July 26, 2020 for each one, two and three year performance periods was $29.04, $32.94 and $35.99, respectively. During the fourth quarter of fiscal year 2020, management identified certain immaterial errors related to share-based compensation expense of market-condition awards granted during fiscal years 2018, 2019 and 2020. The impact of the errors was not material and the Company has corrected the consolidated financial statements and all other financial information presented in this Quarterly Report on Form 10-Q. Refer to Note 16 for a discussion of the Company's assessment of the errors and impact on its consolidated financial statements. Restricted Stock Units, Employees The Company grants restricted stock units to certain employees, which are expected to be settled with shares of the Company's common stock. The grant date for these awards is equal to the measurement date. These awards are valued as of the measurement date, based on the fair value of the Company's common stock at the grant date, and recognized as share-based compensation expense over the requisite vesting period (typically 4 years). In the six months ended July 26, 2020, the Company granted 255,370 restricted stock units to employees. Restricted Stock Units, Non-Employee Directors The Company maintains a compensation program pursuant to which restricted stock units are granted to the Company’s directors that are not employed by the Company or any of its subsidiaries. Under the Company's director compensation program, a portion of the restricted stock units granted under the program will be settled in cash and a portion will be settled in shares of the Company's common stock. Restricted stock units awarded under the program are scheduled to vest on the earlier of (i) one year after the grant date or (ii) the day immediately preceding the annual meeting of stockholders in the year following the grant. The portion of a restricted stock unit award under the program that is to be settled in cash will, subject to vesting, be settled when the director who received the award separates from the board of directors. The portion of a restricted stock unit award under the program that is to be settled in shares of the Company's common stock will, subject to vesting, be settled promptly following vesting. In the six months ended July 26, 2020, the Company granted 12,536 restricted stock units that settle in cash and 10,968 restricted stock units that settle in shares.

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