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STOCK-BASED COMPENSATION

3 Months Ended

Jun. 29, 2019

Share-based Payment Arrangement [Abstract]

NOTE 3 – STOCK-BASED COMPENSATION

The Company has a share-based incentive plan (the “2003 Plan”) that provides for, among other awards, grants of restricted stock units and stock options to directors, officers and key employees at the fair market value at the date of grant. At June 29, 2019, 1.0 million restricted stock units or stock options were available for future grant under the 2003 Plan.

The Company receives an excess tax benefit related to restricted stock vesting and stock options exercised and redeemed. The discrete tax benefits related to share-based compensation activity during the first quarter of fiscal year 2020 and 2019 were $0.5 million and $0.1 million, respectively.

Restricted Stock Units: The Company grants time-based and performance-based restricted stock units as a component of executive compensation. Expense for restricted stock grants is recognized on a straight-line basis for the service period of the stock award based upon fair value of the award on the date of grant. The fair value of the restricted stock grants is the quoted market price for the Company’s common stock on the date of grant. These restricted stock units are either time vested or vest following the third fiscal year from the date of grant subject to cumulative diluted earnings per share targets over the eligible period.

Compensation cost ultimately recognized for performance-based restricted stock units will equal the grant date fair market value of the unit that coincides with the actual outcome of the performance conditions. On an interim basis, the Company records compensation cost based on the estimated level of achievement of the performance conditions. The expense relating to the time vested restricted stock units is recognized on a straight-line basis over the requisite service period for the entire award.

The Company achieved 131% of the target level for the performance-based restricted stock units granted in the fiscal year ended March 25, 2017 and as a result, issued 108 shares of common stock to executive officers and certain key employees during the first quarter of fiscal year 2020. The following table summarizes the non-vested restricted stock units outstanding as of June 29, 2019:

		Total	Grant Date		Estimated
		Number	Fair		Level of
Date	Measurement	of Units	Value		Achievement at
Granted	Period	Outstanding	Per Unit		June 29, 2019
April 2017	April 2017 – March 2020	68	$	12.90	90% of target level
April 2018	April 2018 – March 2021	1	$	15.65	Time Vested
May 2018	April 2018 – March 2020	26	$	15.30	100% of target level
May 2018	April 2018 – March 2020	26	$	15.30	Time Vested
October 2018	October 2018 – September 2027	10	$	20.81	Time Vested
March 2019	April 2019 – March 2021	25	$	23.50	100% of target level
March 2019	April 2019 – March 2021	25	$	23.50	Time Vested

Total expense relating to performance-based restricted stock units, based on grant date fair value and the achievement criteria, was $0.1 million and $0.2 million in the first quarter of fiscal year 2020 and fiscal year 2019, respectively. As of June 29, 2019, unearned compensation, to be recognized over the grants’ respective service periods, totaled $1.9 million.

Stock Options: The Company grants stock options to employees and directors equal to the quoted market price of the Company’s stock at the date of the grant. The fair value of stock options is estimated using the Black-Scholes option pricing formula that requires assumptions for expected volatility, expected dividends, the risk-free interest rate and the expected term of the option. Expense for stock options is recognized on a straight-line basis over the requisite service period for each award. Options vest either immediately or over a period of up to five years using a straight-line basis and expire either five years or ten years from the date of grant.

The following table summarizes the Company’s options as of and for the first quarter ended June 29, 2019:

			Weighted		Weighted
			Average		Average
	Number		Exercise		Remaining	Aggregate
	of		Price Per		Contractual	Intrinsic
	Shares		Share		Term (in years)	Value
Outstanding as of March 30, 2019	291		$	11.16
Granted	-			-
Exercised	(25	)	$	12.00
Forfeited	-			-
Redeemed	-			-
Outstanding as of June 29, 2019	266		$	11.08	5	$	3,859
Exercisable as of June 29, 2019	246		$	10.29	4	$	3,764

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the first quarter of fiscal year 2020 and the exercise price, multiplied by the number of in-the-money stock options) that would have been received by the option holders had all holders exercised their options on June 29, 2019. The amount of aggregate intrinsic value will change based on the fair market value of the Company’s common stock.

Total expense related to stock options was less than $0.1 million during the first quarter of fiscal year 2020. There was no expense related to stock options during the first quarter of fiscal year 2019. Total unrecognized compensation cost related to non-vested stock options as of June 29, 2019 was $0.1 million, which is expected to be recognized over a period of five years. The aggregate intrinsic value of stock options exercised during the first quarter of fiscal year 2020 was $0.3 million. Cash received from the exercise of options the first quarter of fiscal year 2020 was $0.3 million. There were no stock options exercised during the first quarter of fiscal year 2019.