Note 10 — Stock-Based Compensation

The cost that has been charged against income for stock-based compensation is set forth below (in thousands):

	Three Months Ended
	March 30, 2018		March 31, 2017
Employee stock options	$	619	$	268
Restricted stock		51		40
Restricted stock units		598		202
Nonemployee stock options		33		—
Total	$	1,301	$	510

The Company recorded stock-based compensation costs in the following categories on the accompanying Condensed Consolidated Statements of Operations (in thousands):

	Three Months Ended
	March 30, 2018		March 31, 2017
Cost of sales	$	3	$	2
General and administrative		519		264
Marketing and selling		460		116
Research and development		319		128
Total stock-based compensation expense		1,301		510
Amounts capitalized as part of inventory		122		52
Total stock-based compensation	$	1,423	$	562

Stock Option Plan

Our Amended and Restated 2013 Omnibus Equity Incentive Plan (“the Plan”) provides for various forms of stock-based incentives. To date, of the available forms of awards under the Plan, the Company has granted only stock options, restricted stock, unrestricted share grants, restricted stock units (“RSUs”), and performance contingent stock units. Options under the plan are granted at fair market value on the date of grant, become exercisable over a three-year period, or as determined by our Board of Directors, and expire over periods not exceeding 10 years from the date of grant. Certain option and share awards provide for accelerated vesting under certain circumstances in the event of a change in control (as defined in the Plan). Pursuant to the Plan, options for 4,070,281 shares were outstanding at March 30, 2018 with exercise prices ranging between $0.95 and $17.62 per share. Restricted stock grants under the Plan generally vest over a period between one to three years. There were 21,143 shares of restricted stock and 379,901 RSUs outstanding at March 30, 2018. As of March 30, 2018, there were 653,076 shares available for grants under the Plan.

Assumptions

The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model applying the weighted-average assumptions noted in the following table. Expected volatilities are based on historical volatility of the Company’s stock. The expected term of options granted is derived from the historical exercises and post-vesting cancellations and represents the period of time that options granted are expected to be outstanding. The Company has calculated an 11% estimated forfeiture rate based on historical forfeiture experience. The risk-free rate is based on the U.S. Treasury yield curve corresponding to the expected term at the time of the grant.

	Three Months Ended
	March 30, 2018			March 31, 2017
Expected dividend yield		0	%		0	%
Expected volatility		53	%		57	%
Risk-free interest rate		2.61	%		1.96	%
Expected term (in years)		5.72			5.67

A summary of option activity under the Plan for the quarter ended March 30, 2018 is presented below:

	Option Shares (000’s)
Outstanding at December 29, 2017		3,725
Granted		412
Exercised		(56)
Forfeited or expired		(11)
Outstanding at March 30, 2018		4,070
Exercisable at March 30, 2018		2,793

A summary of restricted stock and RSU activity under the Plan for the quarter ended March 30, 2018 is presented below:

	Restricted Shares (000’s)		Restricted Units (000’s)
Outstanding at December 29, 2017		21		488
Granted		—		47
Vested		—		(152)
Forfeited or expired		—		(3)
Outstanding at March 30, 2018		21		380