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Employee Benefit Plans
6 Months Ended
Jul. 03, 2022
Employee Benefits And Share Based Compensation [Abstract]  
Employee Benefit Plans

Note 10. Employee Benefit Plans

The Company grants options, RSUs and performance shares under the 2016 Incentive Plan (the "2016 Plan"), under which awards may be granted to all employees. Vesting periods under this plan are generally four years for options and RSUs and three years for performance shares. As of July 3, 2022, approximately 0.9 million shares were reserved for future grants under the 2016 Plan.

Additionally, the Company sponsors an Employee Stock Purchase Plan (the “ESPP”), pursuant to which eligible employees may contribute up to 10% of compensation, subject to certain income limits, to purchase shares of the Company's common stock. The terms of the plan include a look-back feature that enables employees to purchase stock semi-annually at a price equal to 85% of the lesser of the fair market value at the beginning of the offering period or the purchase date. The duration of each offering period is generally six-months. In April 2022, the Company approved an amendment to the 2003 Employee Stock Purchase Plan to increase the number of shares of common stock authorized for sale under the Purchase Plan by 1,000,000 shares to a total of 3,000,000 shares. As of July 3, 2022, approximately 1.1 million shares were available for issuance under the ESPP.

Option Activity

Stock option activity was as follows:

 

(In thousands, except per share amounts)

 

Number of

Shares

 

 

Weighted Average Exercise Price Per Share

 

Outstanding as of December 31, 2021

 

 

912

 

 

$

30.19

 

Exercised

 

 

(31

)

 

$

20.02

 

Expired

 

 

(1

)

 

$

21.86

 

Outstanding as of July 3, 2022

 

 

880

 

 

$

30.55

 

 

 

RSU Activity

RSU activity was as follows:

 

(In thousands, except per share amounts)

 

Number

of Shares

 

 

Weighted Average Grant Date Fair Value Per Share

 

Outstanding as of December 31, 2021

 

 

1,555

 

 

$

33.86

 

Granted

 

 

802

 

 

$

22.22

 

Vested

 

 

(481

)

 

$

34.82

 

Cancelled

 

 

(85

)

 

$

31.76

 

Outstanding as of July 3, 2022

 

 

1,791

 

 

$

28.49

 

 

Performance Shares Activity

In July 2020, July 2021 and April 2022, the Company's executive officers were granted performance shares with vesting occurring at the end of a three-year period if performance conditions are met. The number of performance shares earned and eligible to vest are determined based on achievement of the pre-determined performance conditions and the recipients’ continued service with the Company. The number of performance shares to vest could range from 0% to 150% of the target shares granted. At the end of each reporting period, the Company evaluates the probability of achieving the performance conditions and records the related stock-based compensation expense based on performance to date over the service period. 

Performance shares activity was as follows:

(In thousands, except per share amounts)

 

Number

of Shares

 

 

Weighted Average Grant Date Fair Value Per Share

 

Outstanding as of December 31, 2021

 

 

293

 

 

$

33.07

 

Granted

 

 

145

 

 

$

22.37

 

Vested

 

 

 

 

 

 

Cancelled

 

 

 

 

 

 

Outstanding as of July 3, 2022

 

 

438

 

 

$

29.34

 

 

Valuation and Expense Information

 

The following table sets forth the stock-based compensation expense resulting from stock options, RSUs, performance shares and the ESPP included in the Company's unaudited condensed consolidated statements of operations:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

(In thousands)

 

July 3, 2022

 

 

June 27, 2021

 

 

July 3, 2022

 

 

June 27, 2021

 

Cost of revenue

 

$

358

 

 

$

362

 

 

$

744

 

 

$

1,196

 

Research and development

 

 

1,095

 

 

 

1,272

 

 

 

2,182

 

 

 

2,418

 

Sales and marketing

 

 

1,570

 

 

 

1,953

 

 

 

3,026

 

 

 

3,733

 

General and administrative

 

 

2,106

 

 

 

3,315

 

 

 

3,874

 

 

 

6,515

 

Total

 

$

5,129

 

 

$

6,902

 

 

$

9,826

 

 

$

13,862

 

 

 

As of July 3, 2022, $0.6 million of unrecognized compensation cost related to stock options was expected to be recognized over a weighted-average period of 1.0 years and $45.6 million of unrecognized compensation cost related to unvested RSUs and performance shares was expected to be recognized over a weighted-average period of 2.7 years.