Stockholders’ Equity and Stock-Based Compensation

The Company has stock-based awards outstanding under two plans. In 2001, the Company adopted a 2001 Equity Incentive Plan (the Equity Plan). The Equity Plan authorized 7,100,000 shares of common stock, to be issued to employees, non-employees, and members of the Board of Directors (the Board). The Equity Plan had a ten year life and therefore no new equity awards may be issued under this plan. In 2010, the Company adopted a 2010 Equity Incentive Plan (the 2010 Equity Plan) which authorized the issuance of shares of common stock to employees, non-employees, and the Board. The 2010 Equity Plan has been subsequently amended to increase the number of authorized shares. The number of shares authorized under the 2010 Equity Plan is the number of shares approved by the shareholders plus the number of shares of common stock which were available for grant under the Equity Plan, the number of shares of common stock which were the subject of awards outstanding under the Equity Plan and are forfeited, terminated, canceled or expire after the adoption of the 2010 Equity Plan and the number of shares of common stock delivered to the Company either in exercise of an Equity Plan award or in satisfaction of a tax withholding obligation. The option price of statutory incentive stock options shall not be less than 100% of the fair market value of the stock at the date of grant, or in the case of certain statutory incentive stock options, at 110% of the fair market value at the time of the grant. The option price of nonqualified stock options is determined by the Board or Compensation Committee. Options must be exercised within a ten-year period or sooner if so specified within the option agreement. The term and vesting period for restricted stock awards and options granted under the 2010 Equity Plan are determined by the Board’s compensation committee.

The Company has approximately 2.2 million shares of common stock authorized and available for issuance under the Company’s 2010 Equity Plan.

In March 2013, the Company’s Board of Directors authorized the repurchase of the Company’s common stock in open market or negotiated transactions through March 2014. During the period March 2013 through March 2014 the Company purchased 2,241,121 shares of its common stock for $8,290,573.

Stock Options

A summary of stock option activity under the stock award plans as of December 26, 2015 and changes during the twelve month period is as follows:



	2015
	Shares		Weighted Average Exercise Price
Balance, beginning of year	130,500		$	3.49
Options forfeited/canceled	(125,358	)	3.50
Options exercised	(5,142	)	3.16
Balance, end of year	—		$	—

The Company has no stock options outstanding at December 26, 2015 and no stock options were issued in 2015, 2014 or 2013. The intrinsic value of options exercised in 2015, 2014 and 2013 was approximately $0, $26,000 and $0, respectively. The Company issued warrants to purchase 200,000 shares of the Company’s stock at $3.49 which were exercised on a cashless basis in 2015.

Cash received from option and warrant exercises under all share-based payment arrangements was approximately $0.1 million for fiscal year 2015. No tax benefits were realized during the three year period ended 2015 due to the existence of tax net operating loss carryforwards.

NonVested Restricted Common Stock

The Company has issued shares of nonvested restricted common stock to certain employees. Each award requires the employee to fulfill certain obligations, including remaining employed by the Company for one, two or four years (the vesting period) and in certain cases also meeting performance criteria. A summary of the activity for nonvested restricted common stock awards as of December 26, 2015 and changes during the twelve months then ended is presented below:



	Shares		Weighted Average Grant Fair Value
Balance, December 27, 2014	2,551,631		$	3.75
Granted	1,255,696		3.77
Forfeited	(388,320	)	3.64
Vested	(1,226,991	)	3.68
Balance, December 26, 2015	2,192,016		$	3.82

Subsequent to the year ended December 27, 2014, the Company identified an error in its calculation of the weighted average grant fair value of issued restricted stock outstanding as of December 27, 2014. The Company had disclosed a weighted average grant fair value of $4.41 in its Form 10-K for the year ended December 27, 2014, however the correct weighted average grant fair value was $3.75.

During the three month period ended June 27, 2015, the performance conditions for 50,000 awards granted in 2014 were determined and achieved.

The forfeitures in 2015 were primarily due to fact that the performance criteria were not met related to these awards.

Stock-Based Compensation

The following table summarizes stock-based compensation expense related to employee stock options and nonvested restricted common stock awards for the fiscal years 2015, 2014 and 2013 (no tax benefits were recognized):



	2015		2014		2013
Cost of component revenues	$	729,715	$	766,221	$	414,842
Research and development	776,946		965,945		423,548
Selling, general and administrative	1,638,818		3,095,606		3,365,018
Total	$	3,145,479	$	4,827,772	$	4,203,408

Total unrecognized compensation expense for the nonvested restricted common stock as of December 26, 2015 is $4.4 million and is expected to be recognized over a period of two years.