Quarterly report pursuant to Section 13 or 15(d)

Note 10 - Shared-based Compensation and Employee Benefits Plans

v3.19.3.a.u2
Note 10 - Shared-based Compensation and Employee Benefits Plans
9 Months Ended
Dec. 28, 2019
Notes to Financial Statements  
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:
 
   
Three Month Periods Ended
   
Nine Month Periods Ended
 
   
December
2
8
,
201
9
   
December
29
,
201
8
   
December
2
8
,
201
9
   
December
29
,
201
8
 
Dividend yield
   
     
     
     
 
Expected volatility
   
     
96.21
%    
101.97
%    
95.29
%
Risk-free interest rate
   
     
2.84
%    
2.25
%    
2.83
%
Expected term (years)
   
     
8.28
     
8.36
     
8.30
 
 
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:
 
   
Shares
   
Weighted
Average
Exercise Price
   
Weighted
Average
Remaining
Contractual
Terms (Years)
   
Aggregate
Intrinsic
Value
(in thousands)
 
Outstanding at March 31, 2018
   
98,580
    $
8.40
     
8.0
    $
 
Granted
   
100,319
     
4.65
     
9.6
     
 
 
Forfeited / Expired
   
(16,533
)    
10.35
     
 
     
 
 
Outstanding at March 30, 2019
   
182,366
    $
6.15
     
8.4
    $
 
Granted
   
69,880
     
5.04
     
9.4
     
 
 
Forfeited / Expired
   
(2,147
)    
7.15
     
 
     
 
 
Outstanding at December 28, 2019
   
250,099
    $
5.83
     
8.1
    $
 
                                 
Exercisable at December 28, 2019
   
80,275
    $
7.67
     
6.3
    $
 
                                 
At December 28, 2019, expected to vest in the future
   
169,824
    $
4.96
     
9.0
    $
 
   
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:
 
   
Shares
   
Weighted
Average
Fair Value
 
Non-Vested at March 31, 2018
   
19,997
    $
9.75
 
Granted
   
20,680
     
4.65
 
Vested
   
(16,667
)    
4.80
 
Forfeited or cancelled
   
(1,667
)    
11.85
 
Non-Vested at March 30, 2019
   
22,343
    $
8.40
 
Granted
   
     
 
Vested
   
(11,009
)    
11.43
 
Forfeited or cancelled
   
(1,334
)    
12.00
 
Non-Vested at December 28, 2019
   
10,000
    $
4.76