Equity-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2017

Effect of Recording Equity-Based Compensation

The effect of recording equity-based compensation for the three and nine months ended September 30, 2017 and October 1, 2016 was as follows:

	Three Months Ended				Nine Months Ended
	September 30, 2017		October 1, 2016		September 30, 2017		October 1, 2016
	(In thousands)
Equity-based compensation by type of award:
Stock options	$	350	$	211	$	808	$	696
RSUs		731		543		1,943		1,657
ESPP awards		67		151		261		543
Total equity-based compensation	$	1,148	$	905	$	3,012	$	2,896

Option Activity and Changes

Option activity as of September 30, 2017 and changes during the nine months ended September 30, 2017 were as follows:

	Shares			Weighted Average Exercise Price
Options outstanding at December 31, 2016		2,740,364		$	7.00
Options granted		413,075		$	12.33
Options cancelled and forfeited		(61,753	)	$	12.07
Options exercised		(115,273	)	$	6.88
Options outstanding at September 30, 2017		2,976,413		$	7.64
Options exercisable at September 30, 2017		2,127,940		$	7.16

Employee Stock Options 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						Nine Months Ended
	September 30, 2017			October 1, 2016			September 30, 2017			October 1, 2016
Stock Options:
Weighted-average fair value of grants per share	$	3.89		$	1.90		$	4.54		$	1.75
Expected volatility		42.10	%		40.53	%		40.54	%		44.00	%
Risk free interest rate		1.84	%		0.97	%		1.77	%		0.94	%
Expected term of options (in years)		4.08			3.96			4.10			4.29
Dividend yield		None			None			None			None
	Three Months Ended						Nine Months Ended
	September 30, 2017			October 1, 2016			September 30, 2017			October 1, 2016
Stock Purchase Rights:
Weighted-average fair value of grants per share	$	2.76		$	1.69		$	2.75		$	1.55
Expected volatility		48.59	%		37.51	%		43.51	%		39.22	%
Risk free interest rate		1.36	%		0.63	%		1.22	%		0.75	%
Expected term of purchase rights (in years)		0.50			1.00			0.65			1.87
Dividend yield		None			None			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 December 31, 2016		949,455		$	4.64
Granted		363,846		$	11.44
Vested		(500,621	)	$	4.46
Cancelled and forfeited		(14,292	)	$	7.97
Non-vested RSUs at September 30, 2017		798,388		$	7.79

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:

	Nine Months Ended October 1, 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