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 1, 2023, 2,186,096 shares were available for future grant or issuance.

Stock-based compensation expense for the years ended January 1, 2023, January 2, 2022, and January 3, 2021 was $4.9 million, $6.2 million and $5.2 million, respectively. As of January 1, 2023, the total remaining stock-based compensation expense relating to time-based non-vested shares and stock options was approximately $3.8 million and the remaining weighted average vesting period for time-based non-vested shares and stock options was 1.6 years.

Time-based Non-vested Shares. During the year ended January 1, 2023, the Company granted 1,116,000 non-vested shares of common stock to certain employees and officers of the Company and 226,584 non-vested shares of common stock 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. In addition, on April 1, 2022, the Company granted 100,000 time-vested restricted shares with an original two-year vesting period to its new CEO, which became fully vested on December 31, 2022.

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 of common stock 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 of common stock to non-employee directors. These shares generally vest in equal installments over their three-year service period provided that the participant has continuously remained an employee, officer or director of the Company.


	Shares	Weighted Average Grant Date Price
Non-vested at January 2, 2022	1,336,830	$	6.55
Granted	1,442,584	$	2.72
Vested	(882,053)	$	6.18
Forfeited	(129,550)	$	4.08
Non-vested at January 1, 2023	1,767,811	$	3.79

Performance-based Restricted Shares. On April 1, 2022, 600,000 performance-based restricted shares were granted to the Company's new CEO, of which 450,000 shares were subsequently forfeited on December 31, 2022. These shares fully vest on the third anniversary of the grant date based on the achievement of contractually defined EBITDA and share price growth targets. The fair value of the market-based restricted shares was determined using a Monte Carlo simulation valuation model and these shares will be expensed over a three year performance-based vesting period based on the probability of the Company's attainment of the contractually defined targets.

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 to certain employees and officers of the Company, consisting of 739,340 shares of non-qualified stock options and 335,660 shares of incentive stock options ("ISOs"). These options become exercisable in three annual installments and are being expensed 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.

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 2, 2022	1,025,000	$	7.12

Forfeited	(49,500)	$	7.12
Options Outstanding at January 1, 2023	975,500	$	7.12	4.6	$	—
Vested or expected to vest at January 1, 2023	975,500	$	7.12	4.6	$	—
Options exercisable at January 1, 2023	868,250	$	7.12	4.6	$	—

(1) The aggregate intrinsic value is calculated using the difference between the market price of the Company's common stock at January 1, 2023 of $1.36 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 1, 2023. There were no awards having a grant date exercise price less than the market price of the Company's common stock at January 1, 2023.

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 1, 2023, 90,850 RSUs vested into shares of the Company's common stock at a weighted average price of $2.15 per share.

A summary of all RSU activity for the year ended January 1, 2023 was as follows:


			Units
Non-vested at January 2, 2022			129,620
Granted			—
Vested			(90,850)
Non-vested at January 1, 2023			38,770