Note 10 - Shared-based Compensation and Employee Benefits Plans |
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Share-based Payment Arrangement [Text Block] |
( 10 ) Share-based Compensation and Employee Benefits Plans The Company maintains a 2018 Equity Incentive Plan providing for the issuance of up to 166,667 shares of common stock upon the exercise of options, stock awards and grants. With the adoption of the 2018 Equity Incentive Plan, no further awards will be issued under the Company’s 2005 Equity Incentive Plan, though all awards under the 2005 Equity Incentive Plan that are outstanding will continue to be governed by the terms, conditions and procedures set forth in the plan and any applicable award agreement. Option grants under the Company’s 2000 Stock Option Plan are no longer available.Outstanding options 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 while providing services under a service arrangement in the case of non-employees) or within a certain period after termination of employment or service arrangement in the case of non-employees. 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 (SARs), which entitle them to surrender outstanding awards for a cash distribution under certain changes in ownership of the Company, as defined in the stock option plan. As of December 29, 2018,
no SAR’s have been granted under any option plan. As of December 28, 2019, there were 42,493 shares of common stock available for issuance of additional awards under the 2018 Equity Incentive Plan. All outstanding options have a ten -year life from the date of grant. The Company records compensation cost associated with share-based compensation equivalent to the estimated fair value of the awards over the requisite service period.Stock Options
In calculating compensation related to stock option grants, the fair value of each stock option is estimated on the date of grant using the Black-Scholes-Merton option-pricing model and the following weighted average assumptions:
The computation of expected volatility used in the Black-Scholes-Merton option-pricing model is based on the historical volatility of the Company’s share price. The expected term is estimated based on a review of historical employee exercise behavior with respect to option grants. The risk-free interest rate is based on the U.S. Treasury rates with maturity similar to the expected term of the option on the date of grant. A summary of the changes in stock options outstanding for the nine -month period ended December 28, 2019 and the fiscal year ended March 30, 2019 is as follows:
As of December 28, 2019, there was $452,000 of total unrecognized compensation cost related to non-vested options. That cost is expected to be recognized over a weighted average period of 2.90 years. There were 13,240 options and 423 options that vested during the quarters ended December 28, 2019 and December 29, 2018, respectively. The total grant date fair value of options vested during the quarters ended December 28, 2019 and December 29, 2018 was $61,000 and $5,000 respectively. There were 47,700 and 1,940 options that vested during the nine -month periods ended December 28, 2019 and December 29, 2018, respectively. The total grant date fair value of options vested during the nine -month periods ended December 28, 2019 and December 29, 2018 was $185,000 and $34,000, respectively. No shares were exercised during the three and nine -month periods ended December 28, 2019 and December 29, 2018. Share based compensation cost recognized in operating results for the three -month periods ended December 28, 2019 and December 29, 2018 totaled $56,000 and $28,000, respectively. Share based compensation cost recognized in operating results for the nine -month periods ended December 28, 2019 and December 29, 2018 totaled $159,000 and $85,000, respectively.Restricted Stock The Company granted no awards during the third quarter and first nine months of fiscal 2020 and 2019. The restricted stock awards are considered fixed awards as the number of shares and fair value at the grant date are amortized over the requisite service period net of estimated forfeitures. As of December 28, 2019, there was $9,600 of total unrecognized compensation cost related to non-vested awards. That cost is expected to be recognized over a weighted average period of 0.25 years and will be adjusted for subsequent changes in estimated forfeitures. Compensation cost recognized for the restricted and unrestricted stock awards during the third quarter and first nine months of fiscal of 2020 was $9,600 and $70,000. Compensation cost recognized for the restricted and unrestricted stock awards during the third quarter and first nine months of fiscal of 2019 was $26,000 and $83,000.
A summary of the changes in non-vested restricted stock awards outstanding for the nine -month period ended December 28, 2019 and the fiscal year ended March 30, 2019 is as follows:
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