XML 32 R21.htm IDEA: XBRL DOCUMENT
v3.5.0.2

Stock-Based Compensation | 3 Months Ended
--- | ---
Oct. 01, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Stock-Based Compensation | Note 14. Stock-Based Compensation Overview The impact on the Company’s results of operations of recording stock-based compensation by function for the three months ended October 1, 2016 and October 3, 2015 was as follows (in millions):
| Three Months Ended
| October 1, 2016 |  | October 3, 2015
Cost of sales | $ | 1.0 |  |  | $ | 1.2 |
Research and development | 1.7 |  |  | 2.8 |
Selling, general and administrative | 6.0 |  |  | 12.0 |
Stock-based compensation | $ | 8.7 |  |  | $ | 16.0 |
Approximately $0.8 million and $1.3 million of stock-based compensation was capitalized to inventory at October 1, 2016 and October 3, 2015 respectively. Full Value Awards Full Value Awards refer to RSUs and Performance Units that are granted with the exercise price equal to zero and are converted to shares immediately upon vesting. These Full Value Awards are performance-based, time-based or a combination of both and expected to vest over one to four years. The fair value of the time-based Full Value Awards is based on the closing market price of the Company’s common stock on the date of award. During the three months ended October 1, 2016 and October 3, 2015, the Company granted 3.5 million and 4.7 million RSUs, of which 0.4 million and 0.5 million, respectively, are performance-based RSUs with market conditions (“MSUs”). These MSU shares represent the target amount of grants, and the actual number of shares awarded upon vesting of the MSUs may be higher or lower depending upon the achievement of the relevant market conditions. The majority of MSUs vest in equal annual installments over three years based on the attainment of certain total shareholder return performance measures and the employee’s continued service through the vest date. The aggregate grant-date fair value of MSUs granted in the first quarter of fiscal 2017 and fiscal 2016 were estimated to be $3.3 million and $2.9 million, respectively, and was calculated using a Monte Carlo simulation. The remaining 3.1 million and 4.2 million granted during the three months ended October 1, 2016 and October 3, 2015, respectively, are time-based RSUs. The majority of these time-based RSUs vest over three years, with 33% vesting after one year and the balance vesting quarterly over the remaining two years. As of October 1, 2016, $53.1 million of unrecognized stock-based compensation cost related to Full Value Awards remains to be amortized. That cost is expected to be recognized over an estimated amortization period of 2.2 years. Full Value Awards are converted into shares upon vesting. Shares equivalent in value to the minimum withholding tax liability on the vested shares are withheld by the Company for the payment of such taxes. During the three months ended October 1, 2016 and October 3, 2015, the Company paid $5.8 million and $6.4 million, respectively, and classified the payments as operating cash outflows in the Consolidated Statement of Cash Flows. Impact on Stock-based Compensation Due to Separation In connection with the separation of the Lumentum business on August 1, 2015 and in accordance with the Employee Matters Agreement, the Company made certain adjustments to the exercise price and number of shares underlying stock-based compensation awards with the intention of preserving the economic value of the awards for Viavi employees. These adjustments resulted in a modification of equity awards with total incremental stock-based compensation of $13.6 million, to be amortized over the remaining requisite service period from Separation Date to the end of the vesting term. As of October 1, 2016, $2.9 million of unrecognized stock-based compensation cost remains to be amortized. Valuation Assumptions The Company estimates the fair value of the new MSUs granted using a Monte Carlo simulation based on the assumptions described below for the following periods:
| Three Months Ended
| October 1, 2016 |  | October 3, 2015
Volatility of common stock | 35.0 | % |  | 33.0 | %
Average volatility of peer companies | 54.7 | % |  | 52.6 | %
Average correlation coefficient of peer companies | 0.1856 |  |  | 0.0887 |
Risk-free interest rate | 0.8 | % |  | 0.8 | %

X
- 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 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=65895303&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68057994&loc=d3e25284-112666 Reference 3: 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) -URI http://asc.fasb.org/extlink&oid=27013229&loc=d3e301413-122809 Reference 4: 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 5: 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 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
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