Annual report pursuant to Section 13 and 15(d)

Note 11 - Share-Based Compensation and Employee Benefit Plans

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Note 11 - Share-Based Compensation and Employee Benefit Plans
12 Months Ended
Mar. 29, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

11     Share-based Compensation and Employee Benefit Plans


Share-based Compensation The Company has established the 2000 Stock Option Plan and the 2005 Equity Incentive Plan, which provide for the granting of options and restricted stock for up to 2,250,000 shares of common stock at 100% of fair market value at the date of grant, with each grant requiring approval by the Board of Directors of the Company. Option grants under the 2000 Stock Option Plan are no longer available. Options granted generally vest in one or more installments in a four or five year period and must be exercised while the grantee is employed by the Company or within a certain period after termination of employment. Options granted to employees shall not have terms in excess of 10 years from the grant date. Holders of options may be granted stock appreciation rights (SAR), which entitle them to surrender outstanding options for a cash distribution under certain changes in ownership of the Company, as defined in the stock option plan. As of March 29, 2014, no SAR’s have been granted under the option plan. As of March 29, 2014, the total number of shares of common stock available for issuance is 711,427. All outstanding options have either a five year or a ten year life.


The weighted average grant date fair value of stock options granted during the fiscal years ended March 29, 2014 and March 30, 2013 was $1.07 and $0.98, respectively, and was calculated using the following weighted-average assumptions:


Fiscal years ended

 

March 29, 2014

   

March 30, 2013

 

Dividend yield

    -       -  

Expected volatility

    86 %     89 %

Risk-free interest rate

    1.02 %     0.59 %

Expected term (years)

    7.91       6.61  

A summary of the changes in stock options outstanding for the fiscal years ended March 29, 2014 and March 30, 2013 is presented below:


           

 

   

Weighted

Average

   

 

 
           

Weighted

Average

   

Remaining Contractual

   

Aggregate

Intrinsic

 

(Dollars in thousands)

 

Shares

   

Exercise Price

   

Terms (Years)

   

Value

 

Outstanding at March 31, 2012

    1,221,312     $ 1.74       6.7     $ 3  

Granted

    521,000       1.31                  

Exercised

    -       -                  

Forfeited / Expired

    186,062       1.58                  

Outstanding at March 30, 2013

    1,556,250     $ 1.62       6.8     $ 252  

Granted

    430,750       1.32                  

Exercised

    -       -                  

Forfeited / Expired

    248,250       1.72                  

Outstanding at March 29, 2014

    1,738,750     $ 1.53       6.8     $ 113  
                                 

Exercisable at March 29, 2014

    548,825     $ 1.80       4.6     $ 17  
                                 

At March 29, 2014, expected to vest in the future

    925,460     $ 1.21       3.5     $ 74  

As of March 29, 2014, there was $732,000 of total unrecognized compensation cost related to non-vested options and restricted stock granted under the 2005 Plan and outside of the 2005 Plan. That cost is expected to be recognized over a weighted average period of 3.63 years and will be adjusted for subsequent changes in estimated forfeitures. There were 320,525 and 208,425 options vested during the fiscal years ended March 29, 2014 and March 30, 2013 respectively. The total fair value of options vested during the fiscal years ended March 29, 2014 and March 30, 2013 was $365,000 and $275,000, respectively. No cash was received from the exercise of stock options during fiscal 2014 and 2013. Share based compensation cost recognized in operating results for the fiscal years ended March 29, 2014 and March 30, 2013 totaled $310,000 and $295,000, respectively.


Included in the total options outstanding at March 29, 2014 are performance-based options for 100,000 shares granted, which were granted outside of the 2005 Plan. A portion of the options shall vest following the filing of the Company’s Form 10-K for fiscal 2015 provided certain bookings goals are achieved by the Company. No compensation cost was recognized for these stock options during fiscal 2014 because management believes it is not more than likely than not that the performance criteria will be met.


During the year ended March 29, 2014, the vesting for 40,000 options was accelerated in connection with a termination agreement with a former employee. This modification did not result in any incremental compensation expense, however $7,000 of stock-based compensation expense was accelerated and recognized during the year ended March 29, 2014.


Restricted Stock


The Company granted 71,500 shares of restricted stock during fiscal 2014 to certain members of the Board of Directors in lieu of cash compensation for services to be performed in fiscal 2014. The weighted average grant date fair value was $1.53. The Company also granted 30,000 shares of unrestricted stock during 2014 as part of a severance agreement with a former employee. The 30,000 shares did not have a restriction period because they vested immediately on the grant date, but are included in the roll forward schedule of restricted stock below because they were granted under the 2005 Plan. The Company granted 50,000 shares of restricted stock outside the 2005 Plan in fiscal 2013. The restricted stock awards are considered fixed awards as the number of shares and fair value at the grant date is amortized over the requisite service period net of estimated forfeitures. Compensation cost recognized for restricted stock awards for 2014 and 2013 totaled $184,000 and $15,000, respectively.


A summary of the changes in non-vested restricted stock awards outstanding for the fiscal years ended March 29, 2014 and March 30, 2013 is presented below:


           

Weighted

 
           

Average Grant

 
   

Shares

   

Date Fair Value

 

Non-vested at March 31, 2012

    60,000     $ 2.40  

Granted

    50,000       1.18  

Forfeited or cancelled

    60,000       2.40  

Non-vested at March 30, 2013

    50,000     $ 1.18  

Granted

    101,500       1.53  

Vested

    30,000       1.53  

Forfeited or cancelled

    -       -  

Non-vested at March 29, 2014

    121,500     $ 1.39  

401(k) Plans The Company has established 401(k) plans which cover substantially all employees. Participants may make voluntary contributions to the plans for up to 100% of their defined compensation. The Company matches a percentage of the participant’s contributions in accordance with the plan. Participants vest ratably in Company contributions over a four-year period. Company contributions to the plans for fiscal 2014 and 2013 were approximately $44,000 and $47,000, respectively.