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Stock-Based Compensation | 6 Months Ended
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Jun. 29, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company maintains certain stock-based compensation plans that were approved by the Company’s stockholders and are administered by the Board of Directors, or the Compensation and Organization Committee of the Board. The stock-based compensation plans provide for the granting of stock options, shares of restricted stock awards (“RSAs”), restricted stock units (“RSUs”), stock appreciation rights and stock bonuses to employees, non-employee directors, consultants, and service providers. The components and classification of stock-based compensation expense were as follows (in thousands):
| Three Months Ended |  | Six Months Ended
| June 29, 2018 |  | June 30, 2017 |  | June 29, 2018 |  | June 30, 2017
Stock options | $ | 214 |  |  | $ | 283 |  |  | $ | 545 |  |  | $ | 993 |
RSAs and RSUs (time-based) | 1,338 |  |  | 1,155 |  |  | 3,416 |  |  | 3,359 |
Performance-based RSUs (“PSUs”) | 1,333 |  |  | 1,843 |  |  | 2,146 |  |  | 3,598 |
Total stock-based compensation expense | 2,885 |  |  | 3,281 |  |  | 6,107 |  |  | 7,950 |
Less: Discontinued operations | 685 |  |  | 349 |  |  | 924 |  |  | 582 |
Stock-based compensation expense - continuing operations | $ | 2,200 |  |  | $ | 2,932 |  |  | $ | 5,183 |  |  | $ | 7,368 |
Cost of sales | $ | 200 |  |  | $ | 259 |  |  | $ | 376 |  |  | $ | 337 |
Selling, general and administrative expenses | 1,968 |  |  | 2,493 |  |  | 4,747 |  |  | 4,493 |
Research, development and engineering costs | 31 |  |  | 150 |  |  | 55 |  |  | 245 |
Other operating expenses | 1 |  |  | 30 |  |  | 5 |  |  | 2,293 |
Discontinued operations | 685 |  |  | 349 |  |  | 924 |  |  | 582 |
Total stock-based compensation expense | $ | 2,885 |  |  | $ | 3,281 |  |  | $ | 6,107 |  |  | $ | 7,950 |
(7.) STOCK-BASED COMPENSATION (Continued) During the first quarter of 2017, the Company recorded $2.2 million of accelerated stock-based compensation expense in connection with the transition of its former Chief Executive Officer per the terms of his contract, which was classified as Other Operating Expenses. The weighted average fair value and assumptions used to value options granted are as follows:
| Six Months Ended
| June 29, 2018 |  | June 30, 2017
Weighted average fair value | $ | 14.89 |  |  | $ | 10.58 |
Risk-free interest rate | 2.21 | % |  | 1.69 | %
Expected volatility | 39 | % |  | 37 | %
Expected life (in years) | 4.0 |  |  | 4.1 |
Expected dividend yield | — | % |  | — | %
The following table summarizes the Company’s stock option activity:
| Number of Stock Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Life (In Years) |  | Aggregate Intrinsic Value (In Millions)
Outstanding at December 29, 2017 | 931,353 |  |  | $ | 30.89 |  |  |  |  |
Granted | 28,447 |  |  | 45.13 |  |  |  |  |
Exercised | (108,305 | ) |  | 33.47 |  |  |  |  |
Forfeited or expired | (17,542 | ) |  | 38.77 |  |  |  |  |
Outstanding at June 29, 2018 | 833,953 |  |  | $ | 30.87 |  |  | 5.4 |  | $ | 28.2 |
Exercisable at June 29, 2018 | 701,729 |  |  | $ | 29.88 |  |  | 4.8 |  | $ | 24.4 |
During the six months ended June 29, 2018, the Company awarded grants of 0.3 million RSUs to certain members of management, of which 0.2 million are PSUs and the remainder are time-based RSUs that vest over three years. Of the PSUs, 0.1 million of the shares subject to each grant will be earned based upon achievement of specific Company performance metrics over a three-year performance period ending January 1, 2021, and 0.1 million of the shares subject to each grant will be earned based on the Company’s achievement of a relative total shareholder return (“TSR”) performance requirement, on a percentile basis, compared to a defined group of peer companies over a three-year performance period ending January 1, 2021. The number of PSUs earned based on the achievement of the Company performance metrics and TSR performance requirements, if any, will vest based on the recipient’s continuous service to the Company over a period of generally one to three years from the grant date. The time-based RSUs generally vest ratably over a three-year period. The grant-date fair value of the TSR portion of the PSUs granted during the six months ended June 29, 2018 was determined using the Monte Carlo simulation model on the date of grant, assuming the following (i) expected term of 2.92 years, (ii) risk free interest rate of 2.28%, (iii) expected dividend yield of 0.0% and (iv) expected stock price volatility over the expected term of the TSR award of 40%. The grant-date fair value of all other restricted stock awards is equal to the closing market price of Integer common stock on the date of grant. (7.) STOCK-BASED COMPENSATION (Continued) The following table summarizes RSA and RSU activity:
| Time-Vested Activity |  | Weighted Average Fair Value
Nonvested at December 29, 2017 | 163,431 |  |  | $ | 35.96 |
Granted | 147,878 |  |  | 49.30 |
Vested | (11,999 | ) |  | 49.78 |
Forfeited | (4,453 | ) |  | 43.62 |
Nonvested at June 29, 2018 | 294,857 |  |  | $ | 41.97 |
The following table summarizes PSU activity:
| Performance- Vested Activity |  | Weighted Average Fair Value
Nonvested at December 29, 2017 | 469,889 |  |  | $ | 32.37 |
Granted | 159,669 |  |  | 45.37 |
Vested | (127,191 | ) |  | 34.29 |
Forfeited | (147,555 | ) |  | 34.31 |
Nonvested at June 29, 2018 | 354,812 |  |  | $ | 36.72 |

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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