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Stock Options Plans and Stock-Based Compensation | 12 Months Ended
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Jan. 02, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Stock Options Plans and Stock-Based Compensation |
9. | Stock Option Plans and Stock-Based Compensation
The Company has options outstanding under three stock incentive plans: the 2005 Stock Option and Incentive Plan (the "2005 Plan"), the Evolution Robotics, Inc. 2007 Stock Plan (the "2007 Plan") and the 2015 Stock Option and Incentive Plan (the "2015 Plan" and together with the 2005 Plan and the 2007 Plan, the “Plans”). All options that remained outstanding under the 2004 Stock Option and Incentive Plan as of December 27, 2014 were exercised during fiscal 2015. The 2015 Plan is the only one of the three plans under which new awards may currently be granted. Under the 2015 Plan, which became effective May 20, 2015, 3,100,000 shares were initially reserved for issuance in the form of incentive stock options, non-qualified stock options, stock appreciation rights, deferred stock awards, restricted stock units, unrestricted stock awards, cash-based awards, performance share awards and dividend equivalent rights. Stock awards returned to the Plans, with the exception of those issued under the 2007 Plan, as a result of their expiration, cancellation or termination are automatically made available for issuance under the 2015 Plan. Eligibility for incentive stock options is limited to those individuals whose employment status would qualify them for the tax treatment associated with incentive stock options in accordance with the Internal Revenue Code of 1986, as amended. As of January 2, 2016, there were 2,484,296 shares available for future grant under the 2015 Plan. Options granted under the Plans are subject to terms and conditions as determined by the compensation committee of the board of directors, including vesting periods. Options granted under the Plans are exercisable in full at any time subsequent to vesting, generally vest over four years, and expire five or ten years from the date of grant or, if earlier, 90 days from employee termination. The exercise price of stock options is typically equal to the closing price on the NASDAQ Global Market on the date of grant. Other awards granted under the Plans generally vest over periods from three to four years. In conjunction with the acquisition of Evolution Robotics, Inc. on October 1, 2012, each outstanding and unvested incentive stock option held by Evolution employees as of the acquisition date was automatically converted into stock options of the Company under the same terms and conditions as were applicable to the original Evolution grants. The number of replacement options granted and the associated exercise prices were determined utilizing a conversion ratio as defined in the merger agreement. There were 114,248 incentive stock options issued by the Company as a result of this automatic conversion with exercise prices ranging from $2.55 to $4.81. All of these options were granted from the 2007 Plan, which was assumed by the Company as a result of the acquisition. The Company recognized $3.4 million of stock-based compensation expense during the fiscal year ended January 2, 2016 for stock options. The unamortized fair value as of January 2, 2016 associated with these grants was $6.4 million with a weighted-average remaining recognition period of 2.83 years. The Company expects to recognize associated stock-based compensation expense of $2.6 million, $1.9 million, $1.3 million and $0.6 million in 2016, 2017, 2018 and 2019, respectively. The fair value of each option grant for the fiscal years ended January 2, 2016, December 27, 2014 and December 28, 2013 was computed on the grant date using the Black-Scholes option-pricing model with the following assumptions:
| Fiscal Year Ended
| January 2, 2016 |  | December 27, 2014 |  | December 28, 2013
Risk-free interest rate | 1.47% — 1.75% |  | 1.65% — 1.69% |  | 0.90% — 1.77%
Expected dividend yield | — |  | — |  | —
Expected life | 3.98 — 4.02 years |  | 3.91 — 4.00 years |  | 4.03 — 4.21 years
Expected volatility | 46.5% — 52.4% |  | 52.8% — 56.0% |  | 54.0% — 58.0%
The risk-free interest rate is derived from the average U.S. Treasury constant maturity rate, which approximates the rate in effect at the time of grant, commensurate with the expected life of the instrument. The dividend yield is zero based upon the fact the Company has never paid and has no present intention to pay cash dividends. The Company utilizes company specific historical data for purposes of establishing expected volatility and expected term. Based upon the above assumptions, the weighted average fair value of each stock option granted for the fiscal years ended January 2, 2016, December 27, 2014 and December 28, 2013 was $13.21, $15.87 and $11.17, respectively. The table below summarizes stock option plan activity:
| Number of Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term |  | Aggregate Intrinsic Value(1)
Outstanding at December 29, 2012 | 2,503,667 |  |  | $ | 18.27 |  |  |  |  |
Granted | 293,325 |  |  | 24.60 |  |  |  |  |
Exercised | (840,951 | ) |  | 16.21 |  |  |  |  |
Canceled | (185,666 | ) |  | 22.16 |  |  |  |  |
Outstanding at December 28, 2013 | 1,770,375 |  |  | $ | 19.89 |  |  |  |  |
Granted | 233,181 |  |  | 37.10 |  |  |  |  |
Exercised | (486,252 | ) |  | 18.39 |  |  |  |  |
Canceled | (43,984 | ) |  | 27.17 |  |  |  |  |
Outstanding at December 27, 2014 | 1,473,320 |  |  | $ | 22.89 |  |  |  |  |
Granted | 323,104 |  |  | 32.58 |  |  |  |  |
Exercised | (390,085 | ) |  | 16.57 |  |  |  |  |
Canceled | (118,789 | ) |  | 28.41 |  |  |  |  |
Outstanding at January 2, 2016 | 1,287,550 |  |  | $ | 26.73 |  |  | 4.00 years |  | $11.6 million
Vested and expected to vest at January 2, 2016 | 1,230,537 |  |  | $ | 26.45 |  |  | 3.90 years |  | $11.4 million
Exercisable as of January 2, 2016 | 768,184 |  |  | $ | 23.18 |  |  | 2.74 years |  | $9.6 million
Weighted average fair value of options granted during the fiscal year ended January 2, 2016 |  |  | $ | 13.21 |  |  |  |  |
Options available for future grant at January 2, 2016 | 2,484,296 |  |  |  |  |  |  |
_________________________
(1) | The aggregate intrinsic value on the table was calculated based upon the positive difference between the closing market value of the Company’s stock on January 2, 2016 of $35.40 and the exercise price of the underlying option.
During fiscal years 2015, 2014, and 2013, the total intrinsic value of stock options exercised was $5.9 million, $10.5 million and $12.1 million, respectively. No amounts relating to stock-based compensation have been capitalized. The following table summarizes information about stock options outstanding at January 2, 2016:
|  | Options Outstanding |  | Options Exercisable
Range of Exercise Prices |  | Number Outstanding |  | Weighted Average Remaining Contractual Life |  | Weighted Average Exercise Price | Number Exercisable |  | Weighted Average Exercise Price
$ 3.54 - $ 13.46 |  | 81,723 |  |  | 2.88 years |  | $ | 7.97 |  |  | 78,713 |  |  | $ | 8.09 |
14.52 - 14.52 |  | 144,017 |  |  | 1.25 |  | 14.52 |  |  | 144,017 |  |  | 14.52 |
17.70 - 21.23 |  | 82,171 |  |  | 1.61 |  | 18.44 |  |  | 73,194 |  |  | 18.41 |
22.86 - 22.86 |  | 166,757 |  |  | 4.10 |  | 22.86 |  |  | 112,252 |  |  | 22.86 |
24.53 - 26.59 |  | 167,468 |  |  | 2.85 |  | 25.75 |  |  | 153,635 |  |  | 25.71 |
29.60 - 32.38 |  | 162,225 |  |  | 6.51 |  | 31.04 |  |  | 1,500 |  |  | 31.22 |
33.29 - 33.48 |  | 159,940 |  |  | 3.27 |  | 33.42 |  |  | 125,453 |  |  | 33.46 |
33.72 - 34.30 |  | 168,599 |  |  | 6.24 |  | 34.13 |  |  | 12,671 |  |  | 33.72 |
34.67 - 37.08 |  | 107,648 |  |  | 5.34 |  | 35.83 |  |  | 44,991 |  |  | 35.66 |
43.35 - 43.35 |  | 47,002 |  |  | 4.95 |  | 43.35 |  |  | 21,758 |  |  | 43.35 |
$ 3.54 - $43.35 |  | 1,287,550 |  |  | 4.00 years |  | $ | 26.73 |  |  | 768,184 |  |  | $ | 23.18 |
During the fiscal year ended January 2, 2016, the Company recognized $10.7 million of stock-based compensation expense associated with restricted stock units. As of January 2, 2016, December 27, 2014 and December 28, 2013, the unamortized fair value of all restricted stock units was $24.3 million, $20.1 million and $17.5 million, respectively. The Company expects to recognize associated stock-based compensation expense of $9.7 million, $7.3 million, $5.2 million and $2.1 million in 2016, 2017, 2018 and 2019, respectively. The table below summarizes activity relating to restricted stock units:
| Number of Shares Underlying Restricted Stock |  | Weighted Average Grant Date Fair Value
Outstanding at December 29, 2012 | 941,030 |  |  | $ | 24.09 |
Granted | 521,056 |  |  | 25.87 |
Vested | (348,141 | ) |  | 22.57 |
Forfeited | (186,291 | ) |  | 24.91 |
Outstanding at December 28, 2013 | 927,654 |  |  | $ | 25.50 |
Granted | 372,159 |  |  | 38.25 |
Vested | (318,367 | ) |  | 25.38 |
Forfeited | (71,591 | ) |  | 28.42 |
Outstanding at December 27, 2014 | 909,855 |  |  | $ | 30.53 |
Granted | 576,410 |  |  | 32.33 |
Vested | (340,754 | ) |  | 29.13 |
Forfeited | (121,142 | ) |  | 31.49 |
Outstanding at January 2, 2016 | 1,024,369 |  |  | $ | 31.90 |
In 2014 and 2015, the Company granted performance-based restricted stock units (PSUs) to certain of its employees. The performance metric for these awards is operating income percent, with a threshold requirement for a minimum amount of revenue growth. These awards vest over a three year period. The number of shares actually earned at the end of the three year period will range from 0% to 100% of the target number of PSUs granted based on the Company’s performance against three year operating income and revenue goals. In addition, while all vesting of earned PSUs occurs on the third anniversary of the date of grant, achievement of cumulative intermediate targets for each individual year will allow PSUs to be deemed earned but not yet vested for the intermediate periods. Achievement of the cumulative target will allow all shares subject to the PSUs to be earned regardless of the achievement of the intermediate individual year targets.

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- Definition The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. + References No definition available. + Details
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