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Note 11 - Share-Based Compensation
 12 Months Ended
Jan. 03, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

11.     SHARE BASED COMPENSATION


At January 3, 2015, the Company had four share-based employee compensation plans. The Company measures the fair value of share-based awards, if and when granted, based on the Black-Scholes method and using the closing market price of the Company’s common stock on the date of grant. Awards vest over periods ranging from one to three years and expire within 10 years of issuance. Share-based compensation expense related to awards is amortized in accordance with applicable vesting periods using the straight-line method. Share-based compensation expense of $806 and $849 was recognized for the fiscal years ended January 3, 2015 and December 28, 2013, respectively.


As of January 3, 2015, the Company had approximately $2.0 million of total unrecognized compensation cost related to all non-vested share-based awards granted under the Company’s various share-based plans, which the Company expects to recognize over approximately a three-year period. These amounts do not include the cost of any additional share-based awards that may be granted in future periods or reflect any potential changes in the Company’s forfeiture rate.


The Company granted 15,000 stock options and 200,000 restricted stock units during the fiscal year ended January 3, 2015 and 5,000 stock options and 40,000 restricted stock units during the fiscal year ended December 28, 2013.


The Company estimates that it will recognize expenses for all unvested share-based awards outstanding as of January 3, 2015 as follows:


Fiscal Year

 

Amount

 

2015

  $ 1,002  

2016

    564  

2017

    469  
    $ 2,035  

It is important to note the above estimates are based on certain assumptions that are subject to change and that the actual expense recognized may materially differ from above.


The risk-free rate of return is based on the yield of U.S. Treasury Strips with terms equal to the expected life of the grants as of the grant date. The expected term of grant is based on historical stock option exercise experience. The Company used its historical stock price volatility to compute the expected stock price volatility. The expected dividend yield is based on the Company’s fiscal 2014 dividend rate. The annual forfeiture rate is based on the Company’s historical experience. The Black-Scholes option weighted average assumptions used in the valuation of share based awards for the fiscal years ended January 3, 2015 and December 28, 2013 were as follows:


   

Fiscal Years Ended

 
   

January 3, 2015

   

December 28, 2013

 

Weighted average risk-free interest rate

    1.61 %     1.74 %

Expected term of option (years)

    5       5  

Expected stock price volatility

    37 %     52 %

Expected dividend yield

    0.00 %     0.00 %

Annual forfeiture rate

    2.48 %     5.98 %

Weighted-average grant date fair value

  $ 2.33     $ 2.94  

1996 Executive Stock Option Plan (the 1996 Plan)


The 1996 Plan, approved by the Company’s stockholders in August 1996 and amended in April 1999, provided for the issuance of up to 1,250,000 shares of common stock to officers and key employees of the Company and its subsidiaries through January 1, 2006, at which time the 1996 Plan expired. Options are generally granted at fair market value at the date of grant. The Compensation Committee of the Board of Directors determined the vesting period at the time of grant. As of January 3, 2015, options to purchase 2,000 shares of common stock granted under the 1996 Plan were outstanding.


2000 Employee Stock Incentive Plan (the 2000 Plan)


The 2000 Plan, approved by the Company’s stockholders in April 2001, provides for the issuance of up to 1,500,000 shares of the Company’s common stock to officers and key employees of the Company and its subsidiaries or to consultants and advisors utilized by the Company. The Compensation Committee of the Board of Directors could award incentive stock options or non-qualified stock options, as well as stock appreciation rights, and determined the vesting period at the time of grant. As of January 3, 2015, options to purchase 26,500 shares of common stock granted under the 2000 Plan were outstanding.


2007 Omnibus Equity Compensation Plan (the 2007 Plan)


The 2007 Plan, approved by the Company’s stockholders in June 2007, provides for the issuance of up to 700,000 shares of the Company’s common stock to officers, non-employee directors, employees of the Company and its subsidiaries or consultants and advisors utilized by the Company. No more than 350,000 shares of common stock in the aggregate could be issued pursuant to grants of stock awards, stock units, performance shares and other stock-based awards. No more than 300,000 shares of common stock with respect to awards could be granted to any individual during any fiscal year. The Compensation Committee of the Board of Directors determined the vesting period at the time of grant. As of January 3, 2015, options to purchase 24,500 shares of common stock, as well as 300,000 restricted stock units, were outstanding under the 2007 Plan.


The 1996 Plan, 2000 Plan and 2007 Plan are expired and therefore no additional shares are available for awards thereunder.


2014Omnibus Equity Compensation Plan (the 2014Plan)


The 2014 Plan, approved by the Company’s stockholders in December 2014, provides for the issuance of up to 625,000 shares of the Company’s common stock to officers, non-employee directors, employees of the Company and its subsidiaries or consultants and advisors utilized by the Company. The Compensation Committee of the Board of Directors determines the vesting period at the time of grant. As of January 3, 2015, under the 2014 Plan, 200,000 restricted stock units were outstanding and 425,000 shares were available for awards thereunder.


Restricted Stock Units


On December 11, 2014, the Company granted 200,000 restricted stock units all of which fully vest after three years of continued service. All of these restricted stock units include dividend accrual equivalents, which means that any dividends paid by the Company during the three year vesting period become due and payable after the three year vesting period assuming the grantee’s restricted stock unit fully vests. Dividends for these grants are accrued on the dividend payment dates and included in accounts payable and accrued expenses on the accompanying consolidated balance sheet. Dividends for restricted share units that ultimately do not vest are forfeited. As of January 3, 2015, the Company has 500,000 restricted stock units outstanding, all of which include dividend equivalent rights. Total dividends accrued and payable upon vesting on all restricted stock units as of January 3, 2015 and December 28, 2013 equals $1.3 million and $0.3 million, respectively.


   

Number of Restricted

Stock Units

(in thousands)

   

Weighted Average

Grant Date Fair

Value per Share

 

Outstanding non-vested at December 28, 2013

    300     $ 5.72  

Granted

    200     $ 7.95  

Vested

    -          

Forfeited or expired

    -          

Outstanding non-vested at January 3, 2015

    500     $ 6.61  

Based on the closing price of the Company’s common stock of $6.89 per share on January 2, 2015, the intrinsic value of the non-vested restricted stock units at January 3, 2015 was $3.4 million. As of January 3, 2015, there was approximately $2.0 million of total unrecognized compensation cost related to restricted stock units.


Stock Option Awards


Transactions related to all stock options under all plans are as follows:


   

All Stock Options Outstanding

 
   

Shares

   

Weighted Average

Exercise Price

 

Options outstanding as of December 29, 2012

    307,400     $ 5.34  

Options granted

    5,000     $ 5.78  

Options exercised, net

    (27,500

)

  $ 4.15  

Options forfeited/cancelled

    (8,000

)

  $ 5.16  
                 

Options outstanding as of December 28, 2013

    276,900     $ 5.47  
                 

Options exercisable as of December 28, 2013

    221,900     $ 5.45  
                 

Intrinsic value of outstanding stock options as of December 28, 2013

  $ 504          
                 

Intrinsic value of stock options exercised in fiscal year ended December 28, 2013

  $ 44          
                 

Weighted average grant date fair value of stock options issued during fiscal year ended December 28, 2013

  $ 2.94          
                 

Options outstanding as of December 28, 2013

    276,900     $ 5.47  

Options granted

    15,000     $ 6.10  

Options exercised, net

    (185,836

)

  $ 4.84  

Options forfeited in cashless exercises

    (42,064

)

  $ 4.84  

Options forfeited/cancelled

    (11,000

)

  $ 8.81  
                 

Options outstanding as of January 3, 2015

    53,000     $ 7.65  
                 

Options exercisable as of January 3, 2015

    30,500     $ 8.88  
                 

Intrinsic value of outstanding stock options as of January 3, 2015

  $ 33          
                 

Intrinsic value of stock options exercised in fiscal year ended January 3, 2015

  $ 640          
                 

Weighted average grant date fair value of stock options issued during fiscal year ended January 3, 2015

  $ 2.33          

A summary of the status of our nonvested stock options outstanding as of January 3, 2015, and changes during the year then ended is presented as follows:


Nonvested Stock Options

 

Shares

   

Weighed-Average

Grant-Date

Fair Value

 

Nonvested at December 28, 2013

    55,000     $ 2.86  

Vested

    47,500     $ 2.85  

Forfeited

    0          

Issued nonvested

    15,000     $ 2.33  

Nonvested at January 3, 2015

    22,500     $ 2.53  

The following table summarizes information about stock options outstanding at January 3, 2015:


Range of

Exercise Prices

 

Number of

Outstanding Options

   

Weighted-Average

Remaining

Contractual Life

   

Weighted-Average

Exercise Price

 
       

Outstanding

   

Vested

   

Outstanding

   

Vested

   

Outstanding

   

Vested

 
$4.16 -

$5.78

    13,000       5,500       5.21       3.31     $ 5.27     $ 4.65  
$6.10 -

$6.10

    15,000       0       9.37       0     $ 6.10     $ 0.00  
$9.81 -

$9.81

    25,000       25,000       2.54       2.54     $ 9.81     $ 9.81  
          53,000       30,500       5.13       5.13     $ 7.65     $ 8.88  

Employee Stock Purchase Plan


The Company implemented the 2001 Employee Stock Purchase Plan (the “Purchase Plan”) with shareholder approval, effective January 1, 2001. Under the Purchase Plan, employees meeting certain specific employment qualifications are eligible to participate and can purchase shares of common stock semi-annually through payroll deductions at the lower of 85% of the fair market value of the stock at the commencement or end of the offering period. The purchase plan permits eligible employees to purchase shares of common stock through payroll deductions for up to 10% of qualified compensation. During the fiscal years ended January 3, 2015 and December 28, 2013, there were 67,092 and 58,176 shares issued under the Purchase Plan for net proceeds of $339 and $259, respectively. As of January 3, 2015, there were 122,484 shares available for issuance under the Purchase Plan. Compensation expense, representing the discount to the quoted market price, for the Purchase Plan for the fiscal years ended January 3, 2015 and December 28, 2013 was $114 and $106, respectively.