SHARE-BASED COMPENSATION

Stock Options

On May 31, 2018, the Company entered into a stock option cancellation agreement (the "Option Cancellation Agreement") with L. Allen Baker, Jr., the Company's President and Chief Executive Officer, pursuant to which the Company agreed to pay Mr. Baker $18.00 per share of common stock underlying his vested in-the-money stock options granted under the Company’s 2013 Long-Term Incentive Plan, as amended (the “2013 Plan”), less the exercise price per share thereof, in exchange for the cancellation and termination of such stock options. Pursuant to the terms of the Option Cancellation Agreement, the Company paid $3.3 million to Mr. Baker in exchange for the cancellation of 284,888 stock options granted to him under the 2013 Plan. Mr. Baker continues to own an aggregate of 214,663 shares outstanding of the Company's common stock and an aggregate of 54,785 stock options to purchase common stock.

For the thirteen week periods ended July 1, 2018 and June 25, 2017, the Company recognized $0.1 million and $0.2 million of compensation expense related to stock awards, respectively. For the twenty-six week periods ended July 1, 2018 and June 25, 2017, the Company recognized $0.1 million and $0.3 million of compensation expense related to stock awards, respectively. Unamortized share-based compensation expense as of July 1, 2018 amounted to $0.4 million which is expected to be recognized over the next 2.1 years.

A summary of stock option activity is presented as follows:



	Number of Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life	Total Intrinsic Value of Options (in thousands)
Options outstanding at December 31, 2017	765,411		$	10.27	7.3	$	4,521
Exercised	(52,550	)	$	9.34
Forfeited / Canceled	(292,088	)	$	6.71
Options outstanding at July 1, 2018	420,773		$	12.85	7.5	$	4,374

Options exercisable at December 31, 2017	498,611		$	8.74	6.8	$	3,640
Options exercisable at July 1, 2018	256,373		$	11.67	7.1	$	2,968



	Number of Shares	Weighted Average Grant Date Fair Value
Nonvested outstanding at December 31, 2017	266,800	$	3.09
Nonvested outstanding at July 1, 2018	164,400	$	3.16

For the twenty-six week periods ended July 1, 2018, the Company issued 27,681 shares of common stock upon the cashless exercise of 51,550 stock options.

Warrant Activity

For the thirteen and twenty-six week periods ended July 1, 2018 and June 25, 2017, the Company did not recognize compensation cost related to warrants. There was no unamortized stock compensation expense to be recognized as of July 1, 2018.

A summary of warrant activity is presented as follows:



	Number of Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life	Total Intrinsic Value of Options (in thousands)
Warrants outstanding at December 31, 2017	123,984		$	11.51	2.2	$	577
Exercised	(14,980	)	$	11.13
Warrants outstanding at July 1, 2018	109,004		$	11.57	1.7	$	1,274

Warrants exercisable at December 31, 2017	123,984		$	11.51	2.2	$	577
Warrants exercisable at July 1, 2018	109,004		$	11.57	1.7	$	1,274

There were no nonvested warrants outstanding at July 1, 2018 and December 31, 2017.

For the twenty-six week periods ended July 1, 2018, the Company issued 7,222 shares of common stock upon the cashless exercise of 14,980 warrants.

The intrinsic value in the tables above is the amount by which the market value of the underlying stock exceeded the exercise price of outstanding options or warrants, before applicable income taxes and represents the amount holders would have realized if all in-the-money options or warrants had been exercised on the last business day of the period indicated.