v3.21.1

STOCK-BASED COMPENSATION | 12 Months Ended
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Jan. 03, 2021
Stock-based Compensation |
Stock-Based Compensation | (10) STOCK-BASED COMPENSATION Effective May 5, 2015, the Company adopted the 2015 Equity Plan (the “2015 Plan”), pursuant to which it 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. At the Company’s annual meeting of shareholders held in June 2020, its shareholders approved the amendment to the 2015 Plan to increase the number of common stock reserved for issuance from 1,000,000 to 1,500,000. The Company also maintains 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 January 3, 2021, there were 169,440 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. The Company utilizes 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 the Company’s 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 the Company expects to pay over the term of the stock option.
| • | Volatility – 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 Company recognized stock-based compensation expense in its consolidated statements of operations for the fiscal years ended January 3, 2021 and December 29, 2019, respectively, as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended | ​
(in thousands) |  | January 3, 2021 |  | December 29, 2019 | ​
Stock options | ​ | $ | 457 | ​ | $ | 266 | ​
Restricted stock | ​ |  | 429 | ​ |  | 197 | ​
​ | ​ | $ | 886 | ​ | $ | 463 | ​
​ The following is a roll-forward of the Company’s 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 December 30, 2018 |  | 384 | ​ | $ | 7.43 | ​ | 6.7 | ​ | $ | 29
Granted |  | 212 | ​ |  | 4.37 | ​ | ​ | ​ | ​ | —
Exercised | ​ | (5) | ​ | ​ | 3.90 | ​ | ​ | ​ | ​ | 6
Canceled, forfeited or expired |  | (138) | ​ |  | 5.22 | ​ | ​ | ​ | ​ | 68
Options outstanding at December 29, 2019 |  | 453 | ​ | $ | 6.71 | ​ | 5.7 | ​ | $ | 28
Granted |  | 277 | ​ |  | 3.85 | ​ | ​ | ​ | ​ | —
Exercised |  | (1) | ​ |  | 4.18 | ​ | ​ | ​ | ​ | 1
Canceled, forfeited or expired |  | (154) | ​ |  | 9.91 | ​ | ​ | ​ | ​ | 10
Options outstanding at January 3, 2021 |  | 575 | ​ | $ | 4.49 | ​ | 6.9 | ​ | $ | 401
Options exercisable at January 3, 2021 |  | 285 | ​ | $ | 4.69 | ​ | 6.4 | ​ | $ | 148
​ The following table discloses the weighted-average values of significant assumptions that the Company made in valuing option grants for the periods presented: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended | ​
​ |  | January 3, 2021 | ​ | December 29, 2019 | ​
Weighted-average fair value of options granted during the period | ​ | $ | 1.79 | ​ | $ | 1.88 | ​
Expected life (in years) | ​ |  | 5.1 | ​ |  | 4.6 | ​
Expected dividend | ​ | $ | — | ​ | $ | — | ​
Expected stock volatility | ​ |  | 55.02 | % |  | 50.55 | %
Risk-free interest rate | ​ |  | 0.9 | % |  | 1.9 | %
​ As of January 3, 2021, the total compensation cost related to unvested stock option awards was approximately $544,000, which is expected to be recognized over a period of approximately 3 years. Information regarding the Company’s restricted stock is summarized below: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | ​ | ​ | ​ | Weighted
​ | ​ | ​ | ​ | ​ | ​ | ​ | Average
​ | ​ | ​ | ​ | ​ | ​ | ​ | Remaining
​ | ​ | Number of | ​ | Weighted Average | ​ | Contractual
(number of awards in thousands) |  | Awards |  | Award Date Fair Value |  | Life in Years
Unvested at December 29, 2019 |  | 143 | ​ | $ | 5.00 | ​ | ​
Granted |  | 403 | ​ |  | 4.27 | ​ | ​
Exercised/Released | ​ | (71) | ​ | ​ | 4.85 | ​ | ​
Unvested at January 3, 2021 |  | 475 | ​ | $ | 4.43 | ​ | 2.0
​

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