Stock-Based Compensation

9 Months Ended

Sep. 28, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

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				Nine Months Ended
	September 28, 2018		September 29, 2017		September 28, 2018		September 29, 2017
Employee stock options	$	1,197	$	443	$	2,713	$	1,204
Restricted stock		82		50		192		136
Restricted stock units		501		314		1,593		845
Nonemployee stock options		247		—		428		—
Total	$	2,027	$	807	$	4,926	$	2,185

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

	Three Months Ended				Nine Months Ended
	September 28, 2018		September 29, 2017		September 28, 2018		September 29, 2017
Cost of sales	$	4	$	2	$	11	$	6
General and administrative		701		377		1,875		1,035
Marketing and selling		471		214		1,297		558
Research and development		851		214		1,743		586
Total stock-based compensation expense		2,027		807		4,926		2,185
Amounts capitalized as part of inventory		182		107		449		269
Total stock-based compensation	$	2,209	$	914	$	5,375	$	2,454

Stock Option Plan

Our Amended and Restated 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 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). Restricted stock grants under the Plan generally vest over a period between one to three years. As of September 28, 2018, there were 2,488,237 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						Nine Months Ended
	September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017
Expected dividend yield		0	%		0	%		0	%		0	%
Expected volatility		53	%		57	%		53	%		57	%
Risk-free interest rate		2.84	%		1.83	%		2.71	%		1.95	%
Expected term (in years)		5.72			5.67			5.72			5.67

A summary of option activity under the Plan for the quarter ended September 28, 2018 is presented below:

	Option ‎ Shares ‎ (000’s)
Outstanding at December 29, 2017		3,725
Granted		805
Exercised		(524	)
Forfeited or expired		(27	)
Outstanding at September 28, 2018		3,979
Exercisable at September 28, 2018		2,584

As of September 28, 2018, exercise prices of outstanding stock options ranged between $0.95 and $39.90 per share.

A summary of restricted stock and RSU activity under the Plan for the quarter ended September 28, 2018 is presented below:

	Restricted Shares (000’s)			Restricted ‎ Units ‎ (000’s)
Outstanding at December 29, 2017		21			488
Granted		11			49
Vested		(21	)		(185	)
Forfeited or expired		—			(8	)
Outstanding at September 28, 2018		11			344