SHAREHOLDERS’ EQUITY AND EMPLOYEE BENEFIT PLANS

Common Stock and 401(k) Retirement Plan

The Company has a 401(k) retirement plan (the “Plan”) for eligible U.S. employees. The Plan allows for employee contributions and matching Company contributions from 4% to 6% based upon terms and conditions of the 401(k) Plan.

The following table reflects the Company’s contributions to the Plans during the three months ended December 30, 2017 and December 31, 2016:



	Three months ended
(in thousands)	December 30, 2017		December 31, 2016
Cash	$	501	$	413

Stock Repurchase Program

On August 15, 2017, the Company’s Board of Directors authorized a program (the "Program") to repurchase up to $100 million of the Company’s common stock on or before August 1, 2020. The Company has entered into a written trading plan under Rule 10b5-1 of the Exchange Act to facilitate repurchases under the Program. The Program may be suspended or discontinued at any time and is funded using the Company's available cash, cash equivalents and short-term investments. Under the Program, shares may be repurchased through open market and/or privately negotiated transactions at prices deemed appropriate by management. The timing and amount of repurchase transactions under the Program depend on market conditions as well as corporate and regulatory considerations. During the three months ended December 30, 2017, the Company repurchased a total of 0.1 million shares of common stock at a cost of $3.3 million under the Program. The stock repurchases were recorded in the periods they were delivered and accounted for as treasury stock in the Company's Consolidated Condensed Balance Sheet. The Company records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method. Upon reissuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid-in capital. If the Company reissues treasury stock at an amount below its acquisition cost and additional paid-in capital associated with prior treasury stock transactions is insufficient to cover the difference between acquisition cost and the reissue price, this difference is recorded against retained earnings. As of December 30, 2017, our remaining stock repurchase authorization under the Program was approximately $85.5 million.

Accumulated Other Comprehensive Income

The following table reflects accumulated other comprehensive income reflected on the Consolidated Condensed Balance Sheets as of December 30, 2017 and September 30, 2017:



	As of
(in thousands)	December 30, 2017			September 30, 2017
Gain from foreign currency translation adjustments	$	4,792		$	2,422
Unrecognized actuarial loss on pension plan, net of tax	(1,724		)	(1,736		)
Unrealized gain on hedging	796			1,353
Accumulated other comprehensive income	$	3,864		$	2,039

Equity-Based Compensation

The Company has stockholder-approved equity-based employee compensation plans (the “Employee Plans”) and director compensation plans (the “Director Plans”) (collectively, the “Equity Plans”). As of December 30, 2017, 4.6 million shares of common stock are available for grant to its employees and directors under the 2017 Equity Plan, including previously registered shares that have been carried forward for issuance under the 2009 Equity Plan.

•

In general, stock options and time-based restricted stock awarded to employees vest annually over a three-year period provided the employee remains employed by the Company. The Company follows the non-substantive vesting method for stock options and recognizes compensation expense immediately for awards granted to retirement eligible employees, or over the period from the grant date to the date retirement eligibility is achieved.

•

Relative TSR Performance Restricted Stock ("Relative TSR PSU") entitles the employee to receive common shares of the Company on the award vesting date, if market performance objectives that measure relative total shareholder return (“TSR”) are attained. Relative TSR is calculated based upon the 90-calendar day average price of the Company's stock as compared to specific peer companies that comprise the GICS (45301020) Semiconductor Index. TSR is measured for the Company and each peer company over a performance period, which is generally three years. Vesting percentages range from 0% to 200% of awards granted. The provisions of the market-based performance restricted stock are reflected in the grant date fair value of the award; therefore, compensation expense is recognized regardless of whether the market condition is ultimately satisfied. Compensation expense is reversed if the award is forfeited prior to the vesting date.

•

Special/Growth Performance Restricted Stock (“Special/Growth PSU”) entitles the employee to receive common shares of the Company on the three-year anniversary of the grant date (if employed by the Company) if revenue growth targets set by the Management Development and Compensation Committee (“MDCC”) of the Board of Directors on the date of grant are met. If revenue growth targets are not met, performance-based restricted stock does not vest. Certain Special/Growth PSUs vest based on achievement of strategic goals over a certain time period or periods set by the MDCC. If the strategic goals are not achieved, the PSUs do not vest.

Equity-based compensation expense recognized in the Consolidated Condensed Statements of Operations for the three months ended December 30, 2017 and December 31, 2016 was based upon awards ultimately expected to vest. Following the early adoption of ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting in this quarter, forfeitures have been accounted for when they occur.

The following table reflects restricted stock and common stock granted during the three months ended December 30, 2017 and December 31, 2016:



	Three months ended
(shares in thousands)	December 30, 2017	December 31, 2016
Time-based restricted stock	430	696
Relative TSR PSU	153	373
Special/Growth PSU	59	—
Common stock	9	14
Equity-based compensation in shares	651	1,083

The following table reflects total equity-based compensation expense, which includes restricted stock, stock options and common stock, included in the Consolidated Condensed Statements of Operations during the three months ended December 30, 2017 and December 31, 2016:



	Three months ended
(in thousands)	December 30, 2017		December 31, 2016
Cost of sales	$	132	$	141
Selling, general and administrative	2,323		2,734
Research and development	654		727
Total equity-based compensation expense	$	3,109	$	3,602

The following table reflects equity-based compensation expense, by type of award, for the three months ended December 30, 2017 and December 31, 2016:



	Three months ended
(in thousands)	December 30, 2017		December 31, 2016
Time-based restricted stock	$	2,135	$	2,489
Relative TSR PSU	723		933
Special/Growth PSU	56		—
Common stock	195		180
Total equity-based compensation expense	$	3,109	$	3,602