Stockholders' Equity

12 Months Ended

Dec. 31, 2016

Stockholders' Equity

Stockholders' Equity

10.     Stockholders’ Equity

Our 2015 Equity Incentive Plan (the “2015 Plan”) was approved at our 2015 annual meeting of stockholders.  The 2015 Plan replaces our Amended and Restated 2005 Equity Incentive Plan (the “2005 Plan”).  Under the 2015 Plan, we are authorized to issue up to 1,400,560 shares of our Common Stock, which number may be increased by up to 250,000 shares subject to any option or award outstanding under the 2005 Plan that are canceled or forfeited for any reason.  If any shares of our Common Stock subject to awards granted under the 2015 Plan are canceled, those shares will be available for future awards under such plan.  The 2015 Plan expires in May 2025.  Awards granted under the 2015 Plan may include: nonqualified stock options, incentive stock options, restricted stock, restricted stock units, performance shares, performance units, and other stock-based awards and cash-based awards.

As of December 31, 2016, there were 956,088 shares of Common Stock available for awards under the 2015 Plan.

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.

During the fiscal years ended December 31, 2016, December 26, 2015 and December 27, 2014, the total stock-based compensation expense from restricted Common Stock recognized in the financial statements was $1.5 million, $1.1 million and $1.1 million, respectively.  There were no stock-based compensation costs which were capitalized. 

The following table summarizes activities related to restricted stock awards for the year ended December 31, 2016:

		Weighted
		Average Grant
	Number	Date Fair Value
Nonvested balance at December 26, 2015	88,166	$	8.25
Granted	—	$	—
Vested and released	(61,163)	$	7.96
Forfeited	(18,670)	$	7.20
Nonvested balance at December 31, 2016	8,333	$	12.78

As of December 31, 2016 the total unrecognized costs related to non-vested restricted stock awards was $0.1 million, which is expected to be recognized over a weighted average period of less than one year.  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 year ended December 31, 2016:

		Weighted
		Average Grant
	Number	Date Fair Value
Nonvested balance at December 26, 2015	302,113	$	10.40
Granted	328,368	$	7.09
Vested and released	(78,947)	$	10.21
Forfeited	(10,188)	$	11.18
Nonvested balance at December 31, 2016	541,346	$	8.40

As of December 31, 2016 the total unrecognized costs related to non-vested restricted stock units was $2.3 million, which is expected to be recognized over a weighted average period of 1.8 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 $0.2 million, $0.4 million and $0.6 million for the fiscal years ended December 31, 2016, December 26, 2015 and December 27, 2014, respectively, which reduced income from operations accordingly.  There were no stock-based compensation costs that were capitalized.

The following table summarizes stock option activity during the year ended December 31, 2016:

				Aggregate		Weighted Average
		Weighted		Intrinsic Value		Remaining
	Options	Average		(in-the-money		Contractual Life
	Outstanding	Exercise Price		options)		(in years)
Outstanding at December 26, 2015	644,602	$	5.30
Granted	—	$	—
Exercised	(38,000)	$	4.92
Forfeited or expired	(39,000)	$	6.67
Outstanding at December 31, 2016	567,602	$	5.23	$	2,767,532	4.41

As of December 31, 2016, the total unrecognized costs related to non-vested stock options granted were $0.2 million.  We expect to recognize such costs in the financial statements over a weighted average period of 1.3 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 $9.85 as of December 31, 2016, 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 $2.8 million as of December 31, 2016 based on the exercise price and our closing stock price of $9.85 as of December 31, 2016.

The following table summarizes information about stock options outstanding and exercisable at December 31, 2016:

						Weighted
						Average
						Remaining	Weighted			Weighted
						Contractual	Average			Average
Range of					Options	Life	Exercise		Options	Exercise
Exercise Prices					Outstanding	(in years)	Price		Exercisable	Price
$	1.70	-	$	2.40	173,600	1.9	$	1.88	173,600	$	1.88
$	3.44	-	$	6.55	218,550	4.6	$	5.04	198,250	$	4.88
$	7.21	-	$	12.78	153,800	6.5	$	8.17	92,600	$	7.89
$	13.21	-	$	13.21	21,652	7.5	$	13.21	21,652	$	13.21
					567,602	4.4	$	5.23	486,102	$	4.75

Prior to May 2008, all stock option grants had a five-year term.  The fair value of these stock option grants is amortized to expense over the service period, generally five years for employees and one year for members of the Board.  In May 2008, our Board approved a 10-year term for all future stock option grants, with service periods of five years for employees and one year for members of the Board.  We issue new shares upon the exercise of stock options, as opposed to reissuing treasury shares.

Preferred Stock

We have authorized 50,000 shares preferred stock, $100 par value (“Preferred Stock”), none of which are outstanding.  We may issue such shares of Preferred Stock in the future without stockholder approval.