Employee Share-Based Compensation

9 Months Ended

Oct. 01, 2016

Share-based Compensation

Employee Share-Based Compensation

Service Period Based Stock Options

The following table summarizes activity of service period based stock options granted to employees at October 1, 2016 and changes during the nine months then ended:

						Remaining				Aggregate
	Number of			Exercise		Contractual		Fair		Intrinsic
	Shares			Price		Term		Value		Value
Outstanding at January 2, 2016		4,314,264		$	3.5		6.44
Options Granted		579,148			4.27		10	$	2.71
Options Exercised		(238,423	)		2.67					$502,000
Options Forfeited		(326,663	)		4.15
Outstanding at October 1, 2016		4,328,326		$	3.6		6.2			$684,000
Exercisable at October 1, 2016		3,314,918		$	3.46		5.31			$668,000

The aggregate intrinsic values in the table above are based on the Company’s stock price of $2.98, which is the closing price of the Company’s stock on the last day of business for the period ended October 1, 2016.

The fair value of the Company’s stock options was estimated at the date of grant using the Black-Scholes option pricing model. The table below outlines the weighted average assumptions for options granted to employees during the nine months ended October 1, 2016.

Nine Months Ended October 1, 2016
Expected term	6.0 years
Expected volatility	73%
Expected dividends	0.00%
Risk-free rate	1.33%

As of October 1, 2016, there was approximately $2,271,000 of total unrecognized compensation expected to be recognized over a weighted average period of 3.0 years..

Employee Share-Based Compensation

The Company recognized compensation expense of approximately $260,000 and $881,000 in general and administrative expenses in the statement of operations for the three and nine months ended October 1, 2016, respectively, and approximately $418,000 and $1,238,000 for the three and nine months ended October 3, 2015, respectively.