(9) STOCK-BASED COMPENSATION

Effective May 5, 2015, we adopted the 2015 Equity Plan (the “2015 Plan”), pursuant to which we may grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance stock units and other stock and cash awards to eligible participants. We also maintain an Amended and Restated 2005 Stock Incentive Plan (the “2005 Plan”). The 2005 Plan prohibits the granting of options pursuant to the 2005 plan after May 12, 2015, the tenth anniversary of the date the 2005 Plan was approved by the Company’s shareholders. Nonetheless, the 2005 Plan will remain in effect until all outstanding incentives granted thereunder have either been satisfied or terminated. As of December 31, 2017, there were no shares available for grant pursuant to the 2015 Plan.

Stock options granted to employees and directors generally vest over two to five years, in monthly or annual installments, as outlined in each agreement. Options generally expire ten years from the date of grant. Compensation expense equal to the grant date fair value of the options is recognized in general and administrative expense over the applicable service period.

Stock options granted to certain non-employees either vest immediately or monthly over a period of two years. Options generally expire ten years from the date of grant. Compensation expense is recognized in general and administrative expense over the applicable service period, and is marked-to-market each period.

The incentive compensation of our Chief Executive Officer is tied to increases in our share price and calls for the issuance of freely tradable shares of our common stock upon the achievement of certain milestones.

We utilize the Black-Scholes option pricing model when determining the compensation cost associated with stock options issued using the following significant assumptions:

Stock price – Published trading market values of our common stock as of the date of grant.

Exercise price – The stated exercise price of the stock option.

Expected life – The simplified method as outlined in ASC 718.

Expected dividend – The rate of dividends that we expect to pay over the term of the stock option.

Volatility – Our actual volatility over the most recent historical period equivalent to the expected life of the option.

Risk-free interest rate – The daily United States Treasury yield curve rate.

The following table outlines stock-based compensation expense, by award type, for the periods presented:


	Year Ended
(in thousands)	December 31, 2017		January 1, 2017
Stock options	$	218	$	311
Shares of common stock		85		—
Restricted stock		10		28
	$	313	$	339

The following is a roll-forward of our stock option activity for the periods presented:


				Weighted
				Average
	Number of			Remaining		Aggregate
	Options	Weighted Average		Contractual		Intrinsic Value
	(in thousands)	Exercise Price		Life in Years		(in thousands)
Options outstanding at January 3, 2016	507		16.66	5.3	$	—
Granted	416		5.55			—
Exercised	(6)		5.90			4
Canceled, forfeited or expired	(231)		19.44			—
Options outstanding at January 1, 2017	686		9.15	5.7		1
Granted	165		4.20			—
Exercised	(3)		5.42			5
Canceled, forfeited or expired	(309)		11.04			—
Options outstanding at December 31, 2017	539	$	6.60	6.6	$	598
Options Exercisable at December 31, 2017	266	$	8.09	4.2	$	187

The following table discloses the weighted-average values of significant assumptions that we made in valuing option grants for the periods presented:


	Year Ended
	December 31, 2017			January 1, 2017
Weighted-average fair value of options granted during the period	$	1.78		$	1.97
Expected life (in years)		5.3			5.2
Expected dividend	$	—		$	—
Expected stock volatility		43.47	%		39.98	%
Risk-free interest rate		2.0	%		1.2	%

As of December 31, 2017, the total compensation cost related to unvested stock option awards was approximately $542,000, which is expected to be recognized over a period of approximately 2.58 years.