2016 Stock Incentive Plan. In 2016, the Company adopted a stock plan entitled the 2016 Stock Incentive Plan (the “2016 Plan”) and reserved and authorized a total of 4,000,000 shares of common stock for grant thereunder. On June 18, 2021, at the 2021 Annual Meeting of Stockholders, the Company' stockholders approved the Second Amendment to the 2016 Plan increasing the authorized total by 3,500,000 to 7,500,000 shares of common stock for grant thereunder. As of January 2, 2022, 3,599,630 shares were available for future grant or issuance.

Stock-based compensation expense for the years ended January 2, 2022, January 3, 2021, and December 29, 2019 was $6.2 million, $5.2 million and $5.8 million, respectively. As of January 2, 2022, the total remaining stock-based compensation expense relating to non-vested shares and stock options was approximately $5.6 million and the remaining weighted average vesting period for non-vested shares and stock options was 1.1 years.

Non-vested Shares. During the year ended January 2, 2022, the Company granted 895,000 non-vested shares of common stock to certain employees and officers of the Company and 92,744 non-vested shares to outside directors of the Company. These shares generally vest in equal installments over their three-year service period, provided the participant has continuously remained an employee, officer, or director of the Company.

During the year ended January 3, 2021, the Company granted 790,000 non-vested shares of common stock to certain employees and officers of the Company and 73,128 non-vested shares to outside directors of the Company. These shares generally vest in equal installments over their three-year service period, provided the participant has continuously remained an employee, officer, or director of the Company.

During the year ended December 29, 2019, the Company granted 417,500 non-vested shares of common stock to certain employees and officers of the Company and 47,470 non-vested shares of common stock to non-employee directors provided that the participant has continuously remained an employee, officer or director of the Company. These shares generally vest in equal installments over their three-year service period. Also in 2019, the Company granted 10,000 non-vested shares of common stock to an interim officer of the Company, which vested in May 2020.


	Shares	Weighted Average Grant Date Price
Non-vested at January 3, 2021	1,167,848	$	7.02
Granted	987,744	$	6.94
Vested	(531,437)	$	7.94
Forfeited	(287,325)	$	7.21
Non-vested at January 2, 2022	1,336,830	$	6.55

Stock Options. During the twelve months ended January 3, 2021, the Company granted in the aggregate options to purchase 1,075,000 shares of its common stock, consisting of 739,340 shares of non-qualified stock options and 335,660 shares of incentive stock options (“ISOs”) to certain employees and officers of the Company. These options become exercisable and are being expensed in equal installments over their three-year service period. The options expire seven years from the date of the grant and were issued with an exercise price equal to the fair market value of the stock price, or $7.12 per share of common stock, on the date of grant.

The following assumptions were used in the Black-Scholes option-pricing model to determine the fair value of stock option awards at the grant date:


	2020
Risk-free interest rate	0.21		%
Expected term (in years)	4.5
Expected volatility	65.10		%
Expected dividend yield	—		%
Fair Value	$	3.65

Expected term represents the period that the stock option awards were expected to be outstanding. Given the Company has not issued stock options since 2010, it concluded that its stock option exercise history did not provide a reasonable basis upon which to estimate expected term and therefore used the simplified method to determine the expected term of this stock option grant. This method bases the expected term calculation on the average of the

vesting term and the contractual term of the awards. The risk-free interest rate was based on the yield of constant maturity U.S. treasury bonds with a remaining term equal to the expected term of the awards. There was no expected dividend yield. The Company estimated the stock price volatility using weekly price observations over the most recent historical period equal to the expected life of the awards.


	Options	Weighted Average Exercise Price		Average Remaining Contractual Life	Aggregate Intrinsic Value (1)
Options outstanding at January 3, 2021	1,050,000

Forfeited	(25,000)	$	7.12
Options Outstanding at January 2, 2022	1,025,000	$	7.12	5.6	$	—
Vested or expected to vest at January 2, 2022	1,025,000	$	7.12	5.6	$	—
Options exercisable at January 2, 2022	348,500	$	7.12	5.6	$	—

(1) The aggregate intrinsic value is calculated using the difference between the market price of the Company's common stock at January 2, 2022 of $2.96 and the grant date exercise price for only those awards that have a grant date exercise price that is less than the market price of the Company's common stock at January 2, 2022. There were no awards having a grant date exercise price less than the market price of the Company's common stock at January 2, 2022.

Restricted Stock Units. The Company has issued restricted stock units (“RSUs”) on shares of the Company's common shares to certain officers of the Company. During the twelve months ended January 2, 2022, the Company issued 99,317 RSUs which generally vest in equal installments over three years. Additionally, 12,805 RSUs were issued as dividend equivalents in connection with the special dividend in 2021 which will vest according to the original vesting schedules of the underlying RSUs. During the twelve months ended January 2, 2022, 19,958 RSUs vested into shares of the Company's common stock at a weighted average price of $6.68 per share.

A summary of all RSU activity for the year ended January 2, 2022 was as follows:


			Units
Non-vested at January 3, 2021			37,456
Granted			112,122
Vested			(19,958)
Non-vested at January 2, 2022			129,620