Equity-Based Compensation (Tables)

6 Months Ended

Jul. 02, 2016

Effect of Recording Equity-Based Compensation

The effect of recording equity-based compensation for the three and six months ended July 2, 2016 and July 4, 2015 was as follows:

	Three Months Ended				Six Months Ended
	July 2, 2016		July 4, 2015		July 2, 2016		July 4, 2015
	(In thousands)
Equity-based compensation by type of award:
Stock options	$	209	$	125	$	485	$	442
RSUs		480		395		1,114		735
Employee stock purchase plan		191		280		392		486
Total equity-based compensation	$	880	$	800	$	1,991	$	1,663

Option Activity and Changes

Option activity as of July 2, 2016 and changes during the six months ended July 2, 2016 were as follows:

	Shares			Weighted Average Exercise Price
Options outstanding at January 2, 2016		2,433,647		$	7.52
Options granted		394,750		$	4.79
Options cancelled and forfeited		(63,799	)	$	12.89
Options exercised		(975	)	$	4.58
Options outstanding at July 2, 2016		2,763,623		$	7.01
Vested and expected to vest at July 2, 2016		2,604,501		$	7.11
Options exercisable at July 2, 2016		1,739,195		$	7.82

Weighted-Average Fair Value of Stock Options and Employee Stock Purchase Rights using Weighted-Average Assumptions

Intevac estimated the weighted-average fair value of stock options and employee stock purchase rights using the following weighted-average assumptions:

	Three Months Ended						Six Months Ended
	July 2, 2016			July 4, 2015			July 2, 2016			July 4, 2015
Stock Options:
Weighted-average fair value of grants per share	$	1.75		$	2.05		$	1.74		$	2.07
Expected volatility		44.14	%		46.13	%		44.11	%		46.26	%
Risk free interest rate		0.94	%		1.44	%		0.94	%		1.43	%
Expected term of options (in years)		4.3			4.0			4.3			4.0
Dividend yield		None			None			None			None

	Six Months Ended
	July 2, 2016			July 4, 2015
Stock Purchase Rights:
Weighted-average fair value of grants per share	$	1.54		$	2.26
Expected volatility		39.33	%		44.05	%
Risk free interest rate		0.76	%		0.39	%
Expected term of purchase rights (in years)		1.93			1.22
Dividend yield		None			None

Summary of Restricted Stock Units Activity

A summary of the RSU activity is as follows:

	Shares			Weighted Average Grant Date Fair Value
Non-vested RSUs at January 2, 2016		553,584		$	6.16
Granted		754,652		$	4.17
Vested		(257,007	)	$	6.49
Cancelled and forfeited		(83,079	)	$	4.70
Non-vested RSUs at July 2, 2016		968,150		$	4.64

Weighted Average Fair Value of Market Condition Based RSUs

Intevac estimated the weighted-average fair value of market condition-based RSUs using the following weighted-average assumptions:

	Six Months Ended
	July 2, 2016
Weighted-average fair value of grants per share	$	2.46
Expected volatility		47.65	%
Risk free interest rate		1.35	%
Expected term (in years)		4.79
Dividend yield		None