XML 32 R22.htm IDEA: XBRL DOCUMENT v3.21.2
Stockholders' Equity
 9 Months Ended
Sep. 25, 2021
Share-based Payment Arrangement [Abstract]  
Stockholders' Equity Stockholders’ Equity
Open Market Sale Agreement
On August 12, 2020, the Company entered into an Open Market Sale Agreement (the “Sales Agreement”) with Jefferies LLC (“Jefferies”), as sales agent and/or principal, pursuant to which the Company issued and sold through Jefferies, from time to time, shares of the Company’s common stock, par value $0.001 per share (the “Shares”), having an aggregate offering price of $96.3 million. Subject to the terms and conditions of the Sales Agreement, Jefferies will use its commercially reasonable efforts to sell the Shares from time to time, based upon the Company’s instructions. The Company has provided Jefferies with customary indemnification rights, and Jefferies will be entitled to a compensation of 3% of the gross proceeds per Share sold. Sales of the Shares, if any, under the Sales Agreement may be made in transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended. The Company has no obligation to sell any of the Shares and may at any time suspend sales under the Sales Agreement or terminate the Sales Agreement.
During the year ended December 26, 2020, we sold 12 million shares of common stock under the Sales Agreement, for net proceeds of approximately $93.4 million, after paying Jefferies a sales commission of approximately $2.9 million related to services provided as the sales agent with respect to the sales of those shares.
2007 Equity Incentive Plan, 2016 Equity Incentive Plan, 2019 Inducement Equity Incentive Plan and Employee Stock Purchase Plan
In February 2007, the Company’s board of directors adopted the 2007 Equity Incentive Plan (the “2007 Plan”) and the Company’s stockholders approved the 2007 Plan in May 2007. The Company reserved a total of 46.8 million shares of common stock for issuance under the 2007 Plan. Upon stockholder approval of the 2016 Equity Incentive Plan (the “2016 Plan”), the Company has ceased granting equity awards under the 2007 Plan; however, the 2007 Plan will continue to govern the terms and conditions of the awards previously granted under the 2007 Plan. As of September 25, 2021, there were no remaining options or RSUs to purchase shares of the Company's common stock under the 2007 Plan.
In February 2016, the Company's board of directors adopted the 2016 Plan and the Company's stockholders approved the 2016 Plan in May 2016. In May 2018, May 2019, May 2020 and May 2021, the Company's stockholders approved amendments to the 2016 Plan to increase the number of shares authorized for issuance under the 2016 Plan by 1.5 million shares, 7.3 million shares, 8.1 million shares and 4.4 million shares, respectively. As of September 25, 2021, the Company reserved a total of 35.2 million shares of common stock for the award of stock options, RSUs and PSUs to employees, non-employees, consultants and members of the Company's board of directors pursuant to the 2016 Plan, plus any shares subject to awards granted under the 2007 Plan that, after the effective date of the 2016 Plan, expire, are forfeited or otherwise terminate without having been exercised in full to the extent such awards were exercisable, and shares issued pursuant to awards granted under the 2007 Plan that, after the effective date of the 2016 Plan, are forfeited to or repurchased by the Company due to failure to vest. The 2016 Plan has a maximum term of 10 years from the date of adoption, or it can be earlier terminated by the Company's board of directors. The 2007 Plan was canceled; however, it continues to govern outstanding grants under the 2007 Plan.
In July 2019, the Company's board of directors approved a new 2019 Inducement Equity Incentive Plan and set the maximum number of shares to be issued at 750,000.
In February of 2007, the Company's board of directors adopted the ESPP and the Company's stockholders approved the ESPP in May of 2007. The ESPP was last amended by the Company's stockholders in May 2019 to increase the shares authorized under the ESPP to a total of approximately 31.6 million shares of common stock. The ESPP has a 20-year term. Eligible employees may purchase the Company’s common stock through payroll deductions at a price equal to 85% of the lower of the fair market values of the stock as of the beginning or the end of six-month offering periods. An employee’s payroll deductions under the ESPP are limited to a maximum of 15% of the employee’s compensation and an employee may not purchase more than 3,000 shares per purchase period.
Stock-based Compensation Plans
As described above, the Company has stock-based compensation plans pursuant to which the Company has granted stock options, RSUs and PSUs, as well as an ESPP for all eligible employees.
The following tables summarize the Company’s equity award activity and related information (in thousands, except per share data): 
Number of Stock
Options		Weighted Average
Exercise
Price
  Per Share  		  Aggregate  
Intrinsic
Value
Outstanding at December 26, 2020
51 $7.57 $174 
Options exercised(51)$7.57 $108 
Outstanding at September 25, 2021
— $— $— 
 
Number of
Restricted
Stock Units		Weighted
Average
 Grant Date 
Fair Value
Per Share		  Aggregate  
Intrinsic
Value
Outstanding at December 26, 202012,468 $5.99 $136,781 
RSUs granted6,568 $8.74 
RSUs released(6,733)$5.95 $59,919 
RSUs canceled(604)$6.79 
Outstanding at September 25, 202111,699 $7.52 $96,045 
 
Number of
Performance
Stock Units		Weighted
Average
 Grant Date 
Fair Value
Per Share		  Aggregate  
Intrinsic
Value
Outstanding at December 26, 20203,466 $5.36 $38,022 
PSUs granted659 $8.61 
PSUs released(235)$7.49 $2,237 
PSUs canceled(999)$4.88 
Outstanding at September 25, 20212,891 $6.09 $23,736 
Expected to vest at September 25, 2021
2,693 $22,110 
The aggregate intrinsic value of the stock options that have been exercised is calculated as the difference between the fair market value of the common stock at the date of exercise and the exercise price of the underlying stock options.
The aggregate intrinsic value of unreleased RSUs and unreleased PSUs is calculated using the closing price of the Company's common stock of $8.21 at September 24, 2021 (the last trading day of the fiscal quarter). The aggregate intrinsic value of RSUs and PSUs released is calculated using the fair market value of the common stock at the date of release.
The following table presents total stock-based compensation cost for instruments granted but not yet amortized, of the Company’s equity compensation plans as of September 25, 2021. These costs are expected to be amortized on a straight-line basis over the following weighted-average periods (in thousands, except for weighted average period data):
Unrecognized
Compensation
Expense, Net		Weighted
Average Period
(in Years)
RSUs$70,768 2.06
PSUs$8,327 2.26
Employee Stock Purchase Plan
The fair value of the ESPP shares was estimated at the date of grant using the following assumptions:
 Three Months EndedNine Months Ended
September 25, 2021September 26, 2020September 25, 2021September 26, 2020
Volatility38%97%
38% - 50%
42% - 97%
Risk-free interest rate0.05%0.12%
0.05% - 0.06%
0.12% - 1.56%
Expected life0.5 years0.5 years0.5 years0.5 years
Estimated fair value$2.22$3.42
$2.22 - $3.11
$2.17- $3.42
Total stock-based compensation expense$1,379$1,650$4,449$4,511
Restricted Stock Units
Pursuant to the 2016 Plan, the Company has granted RSUs to employees and non-employee members of the Company's board of directors. All RSUs awarded are subject to each individual's continued service to the Company through each applicable vesting date. The Company accounted for the fair value of the RSUs using the closing market price of the Company’s common stock on the date of grant. Amortization of stock-based compensation related to RSUs for the three- and nine-month periods ended September 25, 2021 was approximately $10.4 million and $31.8 million, respectively, and for the three- and nine-month periods ended September 26, 2020 was approximately $8.8 million and $26.8 million, respectively.
Performance Stock Units
Pursuant to the 2016 Plan, the Company has granted PSUs to certain of the Company’s executive officers, senior management and certain employees. All PSUs awarded are subject to each individual's continued service to the Company through each applicable vesting date and if the performance metrics are not met within the time limits specified in the award agreements, the PSUs will be canceled.
PSUs granted to the Company’s executive officers and senior management under the 2016 Plan during the first half of 2018 are based on the total stockholder return ("TSR") of the Company's common stock price relative to the TSR of the individual companies listed in the S&P North American Technology Multimedia Networking Index (“SPGIIPTR”) over the span of one year, two years and three years. The number of shares to be issued upon vesting of these PSUs range from zero to two times the target number of PSUs granted depending on the Company’s performance against the individual companies listed in the SPGIIPTR.
    PSUs granted to the Company's executive officers and senior management under the 2016 Plan during 2019, 2020 and the first quarter of 2021 are based on performance criteria related to specific financial targets over the span of a three-year performance period. These PSUs may become eligible for vesting to begin before the end of the three-year performance period, if the applicable financial targets are met. The number of shares to be issued upon vesting of these PSUs are capped at the target number of PSUs granted. Certain other employees were awarded PSUs that will only become eligible to vest upon the achievement of specific financial and operational performance criteria.
The following table summarizes by grant year, the Company’s PSU activity for the nine months ended September 25, 2021 (in thousands):
Total Number of Performance Stock Units2018201920202021
Outstanding at December 26, 20203,466 109 1,757 1,600 — 
PSUs granted659 — — — 659 
PSUs released(235)(104)(131)— — 
PSUs canceled(999)(5)(664)(330)— 
Outstanding at September 25, 20212,891 — 962 1,270 659 
Stock-based compensation expense related to PSUs for the three- and nine-month periods ended September 25, 2021 was approximately $1.7 million and $2.2 million, respectively. Stock-based compensation
expense related to PSUs for the three- and nine-month periods ended September 26, 2020 was approximately $1.4 million and $4.4 million, respectively.
Stock-Based Compensation
The following tables summarize the effects of stock-based compensation on the Company’s consolidated balance sheets and statements of operations for the periods presented (in thousands):
September 25,
2021		December 26,
2020
Stock-based compensation effects in inventory$3,863 $3,979 
 Three Months EndedNine Months Ended
 September 25,
2021		September 26,
2020		September 25,
2021		September 26,
2020
Income tax benefit associated with stock-based compensation$2,444 $2,034 $6,637 $6,299 
Stock-based compensation effects in net loss before income taxes
Cost of revenue$1,968 $1,878 $5,894 $6,043 
Research and development4,714 4,209 14,082 12,362 
Sales and marketing3,059 2,706 9,069 8,136 
General and administration3,891 3,270 9,500 10,001 
       Total stock-based compensation expense$13,632 $12,063 $38,545 $36,542