v3.7.0.1
Stockholders’ Equity
 3 Months Ended
Apr. 01, 2017
Equity [Abstract]  
Stockholders’ Equity
Stockholders’ Equity
Stock-Based Compensation
The following table summarizes stock-based compensation in our accompanying condensed consolidated statements of operations (in thousands):
 
Three Months Ended
 
April 1, 2017
 
March 26, 2016
 
 
 
 
Cost of revenue
$
92

 
$
75

Selling and marketing
246

 
185

Research and development
281

 
230

General and administrative
984

 
878

Income from discontinued operations
—

 
5

   Total stock-based compensation
$
1,603

 
$
1,373


Pursuant to our 2014 Incentive Award Plan (the “2014 Plan”), during the three months ended April 1, 2017, we granted 0.3 million time-based restricted stock units (RSUs) to certain employees and directors, and 0.4 million performance-based RSUs to certain members of management. The number of performance-based RSUs that become eligible to vest for each recipient will be determined in the first quarter of 2018 based upon the Company’s level of achievement of certain financial targets for fiscal 2017. To the extent any performance-based RSUs become eligible to vest, they generally will vest over a three-year period retroactive to March 2017 as continued services are performed. Management is recognizing expense straight-line over the required service period based on its estimate of the number of performance-based RSUs that will vest. If there is a change in the estimate of the number of performance-based RSUs that are probable of vesting, we will cumulatively adjust compensation expense in the period that the change in estimate is made.
RSUs are not included in issued and outstanding common stock until the shares are vested and released. The fair value of the RSUs is measured based on the market price of the underlying common stock as of the date of grant, reduced by the purchase price of $0.001 per share.  The weighted-average grant-date fair value per vested RSU share and the total fair value of vested shares from RSU grants was $7.07 and $1.1 million, respectively, for the three months ended April 1, 2017. During the three months ended March 26, 2016, we granted 0.6 million time-based RSUs to employees, directors and consultants, and 0.5 million performance-based RSUs were granted to certain members of senior management. Management is recognizing expense straight-line over the required service period based on the number of shares that are eligible to vest in accordance with the financial targets met during fiscal 2016.
During the three months ended April 1, 2017, we granted 0.7 million stock options to certain employees and directors with a weighted average exercise price per share of $11.99. During the three months ended March 26, 2016, we granted 1.3 million stock options to certain employees and directors with a weighted average exercise price per share of $6.70.
The following table presents the assumptions used to estimate the fair value of options granted during the periods presented:
 
Three Months Ended
 
April 1,
2017
 
March 26,
2016
Risk-free interest rate
2.12%
 
1.63%
Expected term (years)
6.25
 
6.25
Volatility
33.32%
 
38.24%
Expected dividend yield
—
 
—

A summary of stock option and RSU activity for the three months ended April 1, 2017 was as follows (in thousands for shares and intrinsic value):
 
 
 
 
 
 
 
 
 
Restricted Stock Units
 
Shares
 
Weighted-Average Remaining Contractual Term (Years)
 
Weighted-Average Exercise Price
 
Aggregate Intrinsic Value
 
Shares
 
Weighted-Average Grant Date Fair Value
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding as of December 31, 2016
4,312

 
6.45
 
$
6.64

 
$
13,042

 
1,780

 
$
7.08

Granted(1)
681

 
 
 
$
11.99

 
 
 
666

 
12.00

Settled (RSUs)
—

 
 
 
—

 
 
 
(154
)
 
7.07

Exercised
(241
)
 
 
 
$
5.52

 
 
 
—

 
—

Canceled and forfeited
(85
)
 
 
 
$
13.29

 
 
 
(473
)
 
6.79

Outstanding as of April 1, 2017
4,667

 
6.80
 
$
7.36

 
$
26,645

 
1,819

 
$
8.96

Vested and exercisable as of April 1, 2017
2,837

 
5.24
 
$
5.98

 
$
20,483

 
N/A
 
N/A
____________________________
(1) For RSUs, includes both time-based and performance-based restricted stock units
Aggregate intrinsic value represents the difference between the closing stock price of our common stock and the exercise price of outstanding, in-the-money options. Our closing stock price as reported on the New York Stock Exchange as of March 31, 2017, the final trading day of the three months ended April 1, 2017, was $12.51. The total intrinsic value of options exercised and RSUs vested was approximately $2.9 million for the three months ended April 1, 2017. The aggregate fair value of the options that vested during the three months ended April 1, 2017 was $1.5 million.
As of April 1, 2017, total unrecognized compensation cost related to non-vested stock options and RSUs was approximately $6.6 million and $13.3 million, respectively, which is expected to be recognized over a weighted-average period of 3.1 years and 2.7 years, respectively, to the extent they are probable of vesting. As of April 1, 2017, we had 3.0 million shares available for grant under the 2014 Plan.
Common Stock
As of April 1, 2017, we had reserved the following shares of common stock for future issuance in connection with the following (in thousands):
 
April 1, 2017
Options issued and outstanding
4,667

Restricted stock units issued and outstanding
1,819

Common stock available for stock-based award grants under incentive award plans
3,004

Common stock available for conversion of Series A Redeemable Convertible Preferred Stock
4,596

Total
14,086