Stock-Based Compensation (Tables)

3 Months Ended

Jan. 01, 2022

Share-based Payment Arrangement [Abstract]

Schedule of Weighted-Average Assumptions Used to Estimate Fair Value of Stock Options Granted and Shares Purchased

The fair values of shares purchased under the Employee Stock Purchase Plan ("ESPP") for the three months ended January 1, 2022 and January 2, 2021, respectively, were estimated using the following weighted-average assumptions:


	Employee Stock Purchase Plan
	Three Months Ended
	January 1, 2022			January 2, 2021
Expected life in years	0.5			0.5
Volatility	34.6		%	53.5		%
Risk-free interest rate	0.05		%	0.11		%
Expected dividend yield	—		%	—		%
Weighted average fair value per share	$	63.82		$	36.67

Schedule of Weighted Average Assumptions of Performance Units

The weighted average fair value for the performance units granted for the three months ended January 2, 2021 was determined using a Monte Carlo simulation model incorporating the following weighted average assumptions:


	Three Months Ended
	January 2, 2021
Risk-free interest rate	0.2		%
Volatility	51.7		%
Weighted average fair value per share	$	119.54

Schedule of Stock-Based Compensation Expense

The following table shows total stock-based compensation expense and related tax benefits included in the condensed consolidated statements of operations for the three months ended January 1, 2022 and January 2, 2021 (in thousands):


	Three Months Ended
	January 1, 2022		January 2, 2021
Cost of sales	$	1,731	$	2,272
Research and development	1,236		1,199
Selling, general and administrative	28,940		8,714
Income tax benefit	(2,294)		(1,572)
	$	29,613	$	10,613

Schedule of Restricted Stock Award and Restricted Stock Unit Activity

The following table summarizes the activity of our time-based and performance-based restricted stock units for the first three months of fiscal 2022 (in thousands, except per share amounts):


	Time-based Restricted Stock Units			Performance-based Restricted Stock Units
	Number of Shares	Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Grant Date Fair Value
Nonvested stock at October 2, 2021	471	$	140.16	158	$	131.90
Granted	159	253.12		—	—
Vested (1)	(312)	156.00		(29)	117.43
Forfeited	(5)	144.25		(11)	117.43
Nonvested stock at January 1, 2022	313	$	181.61	118	$	136.74

(1) Time-based restricted stock units vested during the fiscal year. Performance-based restricted stock units are included at 100% of target goal. Under the terms of the market-based awards, the recipient may earn between 0% and 200% of the award.

COHERENT INC 10-Q