Stock-Based Compensation

9 Months Ended

Oct. 03, 2014

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Note 10 — Stock-Based Compensation 

The cost that has been charged against income for stock-based compensation is set forth below (in thousands):

	Three Months Ended				Nine Months Ended
	October 3, 2014		September 27, 2013		October 3, 2014		September 27, 2013
Employee stock options	$	666	$	576	$	2,138	$	2,068
Restricted stock		141		283		666		718
Restricted stock units		705		—		1,857		—
Nonemployee stock options		41		47		75		138
Total	$	1,553	$	906	$	4,736	$	2,924

The Company recorded stock-based compensation expense in the following categories on the accompanying condensed consolidated statements of operations (in thousands):

	Three Months Ended				Nine Months Ended
	October 3, 2014		September 27, 2013		October 3, 2014		September 27, 2013
General and administrative	$	869	$	506	$	2,925	$	1,912
Marketing and selling		326		211		906		593
Research and development		358		189		905		419
Total	$	1,553	$	906	$	4,736	$	2,924

Stock Option Plans

The Amended and Restated 2003 Omnibus Equity Incentive Plan (“the Plan”) provides for various forms of stock-based incentives. To date, of the available forms of awards under the Plan, the Company has granted only stock options, restricted stock, unrestricted share grants, and restricted stock units (RSUs). Options under the plan are granted at fair market value on the date of grant, become exercisable over a three year period, or as determined by the Board of Directors, and expire over periods not exceeding 10 years from the date of grant. Certain option and share awards provide for accelerated vesting if there is a change in control and pre-established financial metrics are met (as defined in the Plan). Pursuant to the Plan, options for 3,227,435 shares were outstanding as of October 3, 2014 with exercise prices ranging between $0.95 and $17.62 per share. Grant of restricted stock  outstanding under the Plan generally vest over periods of one to three years. Grant of RSUs outstanding under the Plan generally vest based on time, performance or a combination of both. There were 246,763 shares of restricted stock and 289,000 shares of RSUs  outstanding as of October 3, 2014. As of October 3, 2014 there were 2,006,452 shares authorized and available for grants under the Plan.

Assumptions

The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model applying the weighted-average assumptions noted in the following table. Expected volatilities are based on historical volatility of the Company’s stock. The expected term of options granted is derived from the historical exercises and post-vesting cancellations, and represents the period of time that options granted are expected to be outstanding. The Company has calculated a 7% estimated forfeiture rate based on historical forfeiture experience. The risk-free rate is based on the U.S. Treasury yield curve corresponding to the expected term at the time of the grant.

	Three Months Ended						Nine Months Ended
	October 3, 2014			September 27, 2013			October 3, 2014			September 27, 2013
Expected dividend yield		0	%		0	%		0	%		0	%
Expected volatility		56.24	%		58.43	%		55.47	%		71.69	%
Risk-free interest rate		1.36	%		1.32	%		1.29	%		0.69	%
Expected term (in years)		4.12			4.12			4.12			4.12

A summary of option activity under the Plan as of October 3, 2014 is presented below:

	Options Shares (000’s)
Outstanding as of January 3, 2014		3,299
Granted		614
Exercised		(593)
Forfeited or expired		(93)
Outstanding as of October 3, 2014		3,227
Exercisable as of October 3, 2014		2,098

Warrants outstanding and exercisable as of October 3, 2104 and January 3, 2014 were 700,000.

A summary of restricted stock and restricted stock units activity under the Plan for the period ending October 3, 2014 is presented below:

	Restricted Shares (000’s)		Restricted Units (000’s)
Outstanding as of January 3, 2014		341		135
Granted		65		304
Vested		(140)		(135)
Forfeited or expired		(19)		(15)
Outstanding as of October 3, 2014		247		289