Stockholders' Equity

6 Months Ended

Jul. 01, 2017

Stockholders' Equity

Stockholders' Equity

9.Stockholders’ Equity

The Company’s 2015 Equity Incentive Plan (the “2015 Plan”) was approved at our 2015 annual meeting of stockholders. 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 Amended and Restated 2005 Equity Incentive 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.   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.  The 2015 Plan has a term of ten years and expires in May 2025.  As of July 1, 2017, there were 552,886 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.  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 conditions 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 awards and units that ultimately vest depend 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 (i) the market price of our Common Stock at the time of grant, and (ii) 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 stock awards are entitled to receive any dividends declared on our Common Stock and have voting rights, regardless of whether such shares have vested.  Recipients of restricted stock units have no voting rights or rights to receive cash dividends with respect to restricted stock unit awards until shares of Common Stock are issued in settlement of such awards.

During the fiscal quarters ended July 1, 2017 and June 25, 2016, the total stock-based compensation expense from restricted Common Stock recognized in the financial statements was $0.4 million and $0.3 million, respectively. During the six months ended July 1, 2017 and June 25, 2016, the total stock-based compensation expense from restricted common stock recognized in the financial statements was $0.7 million and $0.7 million, respectively. There was no stock-based compensation costs capitalized. 

The following table summarizes activities related to restricted stock awards for the six months ended July 1, 2017:

		Weighted
		Average Grant
	Number	Date Fair Value
Nonvested balance at December 31, 2016	8,333	$	12.78
Granted	—	$	—
Vested and released	(8,333)	$	12.78
Forfeited	—	$	—
Nonvested balance at July 1, 2017	—	$	—

As of July 1, 2017, there was no unrecognized costs related to non-vested restricted stock awards.

The following table summarizes activities related to restricted stock units for the six months ended July 1, 2017:

		Weighted
		Average Grant
	Number	Date Fair Value
Nonvested balance at December 31, 2016	541,346	$	8.40
Granted	485,554	$	4.05
Vested and released	(159,910)	$	9.16
Forfeited	(39,208)	$	10.26
Nonvested balance at July 1, 2017	827,782	$	5.62

As of July 1, 2017, the total unrecognized costs related to non-vested restricted stock units was $3.4 million, which is expected to be recognized 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. 

Stock Options

Stock-based compensation expense from stock options recognized in the financial statements totaled $0.1 million and $0.1 million for the fiscal quarters and six months ended July 1, 2017 and June 25, 2016, respectively.  There was no stock-based compensation costs capitalized.

The following table summarizes stock option activity during the six months ended July 1, 2017:

				Aggregate		Weighted Average
		Weighted		Intrinsic Value		Remaining
	Options	Average		(in-the-money		Contractual Life
	Outstanding	Exercise Price		options)		(in years)
Outstanding at December 31, 2016	567,602	$	5.23
Granted	—	$	—
Exercised	—	$	—
Forfeited or expired	(13,687)	$	10.37
Outstanding at July 1, 2017	553,915	$	5.10	$	473,948	3.8

As of July 1, 2017, the total unrecognized costs related to non-vested stock options granted were $0.1 million.  We expect to recognize such costs in the financial statements over a weighted average period of 1.2 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 the closing price of $4.31 of our Common Stock as of July 1, 2017, 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 $0.5 million as of July 1, 2017 based on the exercise price and closing price of $4.31 of our Common Stock as of July 1, 2017.

The following table summarizes information about stock options outstanding and exercisable at July 1, 2017:

						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	-	$	1.86	138,600	1.3	$	1.75	138,600	$	1.75
$	2.4	-	$	4.16	156,450	3.1	$	3.55	156,450	$	3.55
$	4.28	-	$	7.21	213,400	5.4	$	6.88	191,300	$	6.84
$	7.61	-	$	13.21	45,465	6.3	$	12.36	34,465	$	12.37
					553,915	3.8	$	5.10	520,815	$	4.86

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.