Shareholders' Equity

9 Months Ended

Sep. 26, 2015

Stockholders' Equity:

Shareholders' Equity

10.Shareholders’ Equity

The Company’s 2015 Equity Incentive Plan (the “2015 Plan”) was approved at its 2015 Annual Meeting of Stockholders.  The 2015 Plan replaces the Company’s 2005 Equity Incentive Plan (as amended, the “2005 Plan”), which would otherwise terminate automatically on the tenth anniversary of its initial adoption in May 2005.  Under the 2015 Plan, we are authorized to issue up to 1,400,560 shares plus up to 250,000 additional shares subject to any option or other award outstanding under the 2005 Plan that expires or is forfeited for any reason after the date of the 2015 Annual Meeting of Stockholders.  If any shares of the Company’s common stock subject to awards granted under the 2015 Plan are canceled, those shares will be available for future awards under the 2015 Plan.  Awards granted under the 2015 Plan may include: stock options, stock appreciation rights, restricted stock and stock units, performance shares and units, other stock-based awards and cash-based awards.  The 2015 Plan has a term of ten years.

Restricted Common Stock

We have issued shares of restricted common stock in the form of restricted stock awards and restricted stock units as incentives to certain employees, officers and members of our board of directors (the “Board”).  Restricted stock awards and restricted stock units granted to members of the Board are granted with a one-year service period.  Restricted stock awards and restricted stock units granted to the Company’s officers vest over three years and typically contain performance restrictions that are required to be achieved over a three-year measurement period in order for the shares to be released.  The number of performance-based restricted stock ultimately released varies based on whether we achieve certain financial results.  Restricted stock units granted to non-officer employees generally vest over three or five years.  We record compensation expense each period based on the market price of our common stock at the time of grant and, for performance-based restricted stock awards and units, our estimate of the most probable number of shares that will ultimately be released.  The related stock-based compensation expense is included in selling, general and administrative expenses.  Additionally, the compensation expense is adjusted for our estimate of forfeitures.  Recipients of restricted common stock are entitled to receive any dividends declared on our common stock and have voting rights, regardless of whether such shares have vested.

Total stock-based compensation expense from restricted common stock recognized in the financial statements was $0.3 million during the three months ended September 26, 2015 and September 27, 2014.  Stock-based compensation expense from restricted common stock was $0.8 million during the nine months ended September 26, 2015 and September 27, 2014.  There were no stock-based compensation costs capitalized.

The following table summarizes activities related to restricted stock awards for the nine months ended September 26, 2015:

	Number		Weighted Average Grant Date Fair Value
Nonvested balance at December 27, 2014	208,600		$	7.52
Granted	—		—
Vested and released, including shares withheld to cover taxes	(98,710	)	7.08
Forfeited	(21,724	)	6.55
Nonvested balance at September 26, 2015	88,166		$	8.25

As of September 26, 2015, the total unrecognized costs related to non-vested restricted stock awards was $0.2 million, which is expected to be recognized over a weighted average period of 0.5 years.  This expected compensation expense does not reflect any new awards, or modifications to existing awards, that could occur in the future.

The following table summarizes activities related to restricted stock units for the nine months ended September 26, 2015:

	Number		Weighted Average Grant Date Fair Value
Nonvested balance at December 27, 2014	144,929		$	13.21
Granted	212,137		9.10
Vested and released	(37,985	)	9.01
Forfeited	(18,940	)	10.89
Nonvested balance at September 26, 2015	300,141		$	10.98

As of September 26, 2015, the total unrecognized costs related to non-vested restricted stock units was $2.4 million, which is expected to be recognized over a weighted average period of 2.3 years.  This expected compensation expense does not reflect any new awards, or modifications to existing awards, that could occur in the future.

Stock Options

Stock-based compensation expense from stock options recognized in the financial statements totaled $0.1 million for the three months ended September 26, 2015 and September 27, 2014, which reduced income from operations accordingly.  During the nine months ended September 26, 2015 and September 27, 2014, stock-based compensation expense from stock options totaled $0.3 million and $0.4 million, respectively.  There were no stock-based compensation costs capitalized.

The following table summarizes stock option activity during the nine months ended September 26, 2015:

	Options Outstanding		Weighted Average Exercise Price		Aggregate Intrinsic Value (in-the-money options)		Weighted Average Remaining Contractual Life (in years)
Outstanding at December 27, 2014	732,852		$	5.27
Granted	—		$	—
Exercised	(65,200	)	$	4.57
Forfeited or expired	(22,000	)	$	6.58
Outstanding at September 26, 2015	645,652		$	5.30	$	2,578,077	5.77

As of September 26, 2015, the total unrecognized costs related to non-vested stock options granted were $0.5 million.  We expect to recognize such costs in the financial statements over a weighted average period of 2.1 years.  This expected compensation expense does not reflect any new awards, or modifications to existing awards, that could occur in the future.

The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value, based on our closing stock price of $9.00 as of September 26, 2015, which would have been received by the option holders had all option holders exercised options and sold the underlying shares on that date.  The intrinsic value related to vested stock options outstanding was $2.1 million as of September 26, 2015 based on the exercise price and our closing stock price of $9.00 as of September 26, 2015.

The following table summarizes information about stock options outstanding and exercisable at September 26, 2015:

Range of Exercise Prices	Options Outstanding	Weighted Average Remaining Contractual Life (in years)	Weighted Average Exercise Price		Options Exercisable	Weighted Average Exercise Price
$1.70 - $2.40	173,600	3.2	$	1.88	173,600	$	1.88
$3.20 - $6.55	271,600	5.9	$	5.05	187,500	$	4.84
$7.21 - $12.78	178,800	7.8	$	8.03	74,500	$	7.68
$13.21 - $13.21	21,652	8.7	$	13.21	21,652	$	13.21
	645,652	5.8	$	5.30	457,252	$	4.57