Note 6 - Share-based Compensation and Employee Benefit Plans | 6 Months Ended |
Sep. 28, 2013 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | ' |
(6) 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 1,750,000 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 (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 September 28, 2013, no SAR’s have been granted under the option plan. As of September 28, 2013, the total number of shares of common stock available for issuance under the 2005 Equity Incentive Plan is 119,677. All outstanding options have either a five year or a ten year life. 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 |
|
There were options for 258,750 shares granted in the second quarter of fiscal 2014 and options for 395,750 shares granted in the first half of fiscal 2014 with weighted average grant date fair values of $1.03 and $1.11, respectively. There were options for 325,500 shares granted in the second quarter of fiscal 2013 and options for 411,000 shares granted in the first half of fiscal 2013 with weighted average grant date fair values of $0.89 and $0.88, respectively. |
|
Included in the options granted for the three and six month periods ended September 28, 2013 are performance-based options for 80,000 shares and 100,000 shares granted as an inducement to a new employee’s which were outside of the 2005 Plan. A portion of the options shall vest following the filing of the Company’s Form 10K for fiscal 2015 provided certain bookings goals are achieved by the Company. No compensation cost was recognized for these stock options during the three or six month periods ended September 28, 2013 because management believes it is not more than likely than not that the performance criteria will be met. |
|
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 | | | Six Month Periods Ended | |
| | September 28, | | | September 29, | | | September 28, | | | September 29, | |
2013 | 2012 | 2013 | 2012 |
Dividend yield | | - | | | - | | | - | | | - | |
Expected volatility | | | 91.36 | % | | | 86.7 | % | | | 86.04 | % | | | 87.73 | % |
Risk-free interest rate | | | 1.2 | % | | | 0.47 | % | | | 0.97 | % | | | 0.53 | % |
Expected term (years) | | | 8.36 | | | | 5.7 | | | | 7.85 | | | | 6.19 | |
|
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 six month period ended September 28, 2013 and the year ended March 30, 2013 is as follows: |
|
| | Shares | | | Weighted Average Exercise Price | | | Weighted Average Remaining Contractual Terms (Years) | | | Aggregate Intrinsic Value | |
Outstanding at March 31, 2012 | | | 1,221,312 | | | $ | 1.74 | | | | 6.7 | | | $ | 3,041 | |
Granted | | | 521,000 | | | | 1.31 | | | | | | | | | |
Exercised | | | - | | | | - | | | | | | | | | |
Forfeited / Expired | | | 186,062 | | | | 1.58 | | | | | | | | | |
Outstanding at March 30, 2013 | | | 1,556,250 | | | $ | 1.62 | | | | 6.8 | | | $ | 252,455 | |
Granted | | | 395,750 | | | | 1.35 | | | | | | | | | |
Exercised | | | - | | | | - | | | | | | | | | |
Forfeited / Expired | | | 154,000 | | | | 1.78 | | | | | | | | | |
Outstanding at September 28, 2013 | | | 1,798,000 | | | $ | 1.61 | | | | 6.7 | | | $ | 1,700 | |
| | | | | | | | | | | | | | | | |
Exercisable at September 28, 2013 | | | 627,075 | | | $ | 2 | | | | 4.9 | | | $ | 340 | |
| | | | | | | | | | | | | | | | |
At September 28, 2013, expected to vest in the future | | | 1,104,106 | | | $ | 1.22 | | | | 6.7 | | | $ | 2,100 | |
|
As of September 28, 2013, there was $878,000 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 2.0 years. There were 121,375 options that vested during the quarter ended September 28, 2013. There were 42,750 options that vested during the quarter ended September 29, 2012. The total fair value of options vested during the quarters ended September 28, 2013 and September 29, 2012 was $142,000 and $54,000, respectively. There were 322,025 options that vested during the six month period ended September 28, 2013. There were 81,875 options that vested during the six month period ended September 29, 2012. The total fair value of options vested during the six month periods ended September 28, 2013 and September 29, 2012 was $367,000 and $111,000, respectively. No cash was received from the exercise of stock options for the three or six month periods ended September 28, 2013 and September 29, 2012, respectively, and related excess tax benefits or deficiencies were not significant. Share based compensation cost recognized in operating results for the three month periods ended September 28, 2013 and September 29, 2012 totaled $166,000 and $75,000, respectively. Share based compensation cost recognized in operating results for the six month periods ended September 28, 2013 and September 29, 2012 totaled $280,000 and $131,000, respectively. |
|
During the three month period ended September 28, 2013, 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 $38,000 of stock-based compensation expense was accelerated and recognized during the three month period ended September 28, 2013. |
|
Restricted Stock |
|
The Company granted 71,500 shares of restricted stock during the first half of 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 the first half of fiscal 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. No restricted stock awards were granted in the first half of 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 was recognized for the restricted and unrestricted stock awards for the three and six month periods ending September 28, 2013 totaling $31,000 and $48,000, respectively. No compensation cost was recognized for the restricted stock awards during the first half of fiscal 2013 because management did not believe it was probable that certain performance criteria would be met for the then non-vested restricted stock awards. |
|
A summary of the changes in non-vested restricted stock awards outstanding for the six month period ended September 28, 2013 and for the fiscal years ended March 30, 2013 is as follows: |
|
| | Shares | | | Weighted Average Grant Date Fair Value | | | | | | | | | |
Non-vested at March 31, 2012 | | | 60,000 | | | $ | 2.4 | | | | | | | | | |
Granted | | | 50,000 | | | | 1.18 | | | | | | | | | |
Forfeited or cancelled | | | 60,000 | | | | 2.4 | | | | | | | | | |
Non-vested at March 30, 2013 | | | 50,000 | | | $ | 1.18 | | | | | | | | | |
Granted | | | 101,500 | | | | 1.08 | | | | | | | | | |
Vested | | | 30,000 | | | | 1.53 | | | | | | | | | |
Forfeited or cancelled | | | - | | | | - | | | | | | | | | |
Non-vested at September 28, 2013 | | | 121,500 | | | $ | 1.39 | | | | | | | | | |
|