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Share-Based Compensation
 6 Months Ended
Jul. 02, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Share-Based Compensation
Share-Based Compensation

During the second quarter of 2016, our stockholders approved our new 2016 Long-Term Incentive Plan (the “2016 Plan”), as a stock-based compensation plan covering officers, directors, and employees. The 2016 Plan also provides for the granting of certain cash-settled awards, such as Stock Appreciation Rights (“SARs”). These SARs allow the holder to receive in cash the difference between the cash-settled SARs’ grant price (the market value of our stock on the grant date) and the market value of our stock on the vesting date of the SAR. During the second quarter of fiscal 2016, we issued cash-settled SARs under the 2016 Plan.
Quarterly expense attributions of the cash-settled SARs are based on estimates of the fair market value of the awards at the end of each quarter during the service period using the Black-Scholes-Merton option-pricing model (the “Black-Scholes model”).The Black-Scholes model requires the input of highly subjective assumptions such as the expected stock price volatility. The following table summarizes the assumptions used to compute the current fair value of our cash-settled SARs:
Expected volatility
 
64.31
%
Risk-free interest rate
 
0.59
%
Expected term (in years)
 
2.04

Expected dividend yield
 
Not applicable


The cash-settled SARs vest on July 16, 2018, at which time half of any appreciation over the $7.00 exercise price will become payable within thirty days of the vesting date, and the remainder payable within one year. At July 2, 2016, there were 369,000 cash-settled SARs issued and outstanding. Expense recorded in the second quarter of fiscal 2016 for these awards was immaterial.