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Note 11 - Share-based Compensation | 12 Months Ended
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Jan. 02, 2016
Notes to Financial Statements |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] |
11. | SHARE BASED COMPENSATION
At January 2, 2016, 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 $1,446 and $806 was recognized for the fiscal years ended January 2, 2016 and January 3, 2015, respectively. As of January 2, 2016, the Company had approximately $1.0 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 two-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. During fiscal 2015, the Company’s Compensation Committee of the Board of Directors began planning a Long Term Incentive Plan (“LTIP”) for certain executives. The LTIP is anticipated to issue restricted stock units that are contingent upon achieving certain performance metrics as defined by the Compensation Committee over a three fiscal year performance period. Since this plan had not been finalized as of January 2, 2016, no LTIP shares are reflected in the forecasted future expense associated with equity compensation as shown below. The Company granted 48,000 restricted stock units during the fiscal year ended January 2, 2016 and 15,000 stock options and 200,000 restricted stock units during the fiscal year ended January 3, 2015. The Company estimates that it will recognize expenses for all unvested share-based awards outstanding as of January 2, 2016 as follows:
Fiscal Year |  | Amount |
2016 |  | $ | 638 |
2017 |  |  | 362 |
|  | $ | 1,000 |
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 2015 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 2, 2016 and January 3, 2015 were as follows:
|  | Fiscal Years Ended |
|  | January 2, 2016 |  |  | January 3, 2015 |
Weighted average risk-free interest rate |  |  | 1.74 | % |  |  | 1.61 | %
Expected term of option (in years) |  |  | 5 |  |  |  | 5 |
Expected stock price volatility |  |  | 35 | % |  |  | 37 | %
Expected dividend yield |  |  | 0.00 | % |  |  | 0.00 | %
Annual forfeiture rate |  |  | 3.23 | % |  |  | 2.48 | %
Weighted-average grant date fair value |  | $ | 5.00 |  |  | $ | 2.33 |
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 2, 2016, options to purchase 25,000 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 2, 2016, options to purchase 19,500 shares of common stock, as well as 25,834 restricted stock units, were outstanding under the 2007 Plan. The 2000 Plan and 2007 Plan are expired and therefore no additional shares are available for awards thereunder. 2014 Omnibus Equity Compensation Plan (the 2014 Plan) 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 2, 2016, under the 2014 Plan, 183,000 restricted stock units were outstanding and 382,000 shares were available for awards thereunder. Restricted Stock Units During fiscal 2015, the Company issued 48,000 restricted share units, all of which were issued to the Board of Directors as part of their annual compensation program and vest at the end of fiscal 2016. During fiscal 2014, the Company granted 200,000 restricted stock units, 60,000 of which vested in fiscal 2015 with the balance scheduled to vest in fiscal 2017. All of these restricted stock units include dividend accrual equivalents, which means that any dividends paid by the Company after issuance but before vesting of the restricted stock unit become due and payable after the 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 2, 2016, the Company has 208,834 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 2, 2016 and January 3, 2015 equals $0.5 million and $1.3 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 |
Granted |  |  | 48 |  |  | $ | 5.00 |
Vested |  |  | (334 | ) |  | $ | 6.05 |
Forfeited or expired |  |  | (5 | ) |  | $ | 7.95 |
Outstanding non-vested at January 2, 2016 |  |  | 209 |  |  | $ | 7.10 |
Based on the closing price of the Company’s common stock of $5.50 per share on December 31, 2015, the intrinsic value of the non-vested restricted stock units at January 2, 2016 was $1.1 million. As of January 2, 2016, there was approximately $1.0 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 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 |  |  |  |  |
Options outstanding as of January 3, 2015 |  |  | 53,000 |  |  | $ | 7.65 |
Options granted |  |  | 0 |  |  | $ | 0.00 |
Options exercised, net |  |  | (3,500 | ) |  | $ | 4.30 |
Options forfeited/cancelled |  |  | (5,000 | ) |  | $ | 5.78 |
Options outstanding as of January 2, 2016 |  |  | 44,500 |  |  | $ | 8.12 |
Options exercisable as of January 2, 2016 |  |  | 29,500 |  |  | $ | 9.15 |
Intrinsic value of outstanding stock options as of January 2, 2016 |  | $ | 0 |  |  |  |  |
Intrinsic value of stock options exercised in fiscal year ended January 2, 2016 |  | $ | 8 |  |  |  |  |
Weighted average grant date fair value of stock options issued during fiscal year ended January 2, 2016 |  |  | N/A |  |  |  |  |
Stock Option Awards (Continued) A summary of the status of our nonvested stock options outstanding as of January 2, 2016, and changes during the year then ended is presented as follows:
Nonvested Stock Options |  | Shares |  |  | Weighted-Average Grant-Date Fair Value |
Nonvested at January 3, 2015 |  |  | 22,500 |  |  | $ | 2.53 |
Vested |  |  | (2,500 | ) |  | $ | 2.88 |
Forfeited |  |  | (5,000 | ) |  | $ | 2.94 |
Issued nonvested |  |  | 0 |  |  |  |  |
Nonvested at January 2, 2016 |  |  | 15,000 |  |  | $ | 2.33 |
The following table summarizes information about stock options outstanding at January 2, 2016:
Range of Exercise Prices |  | Number of Outstanding Options |  |  | Weighted-Average Remaining Contractual Life |  |  | Weighted-Average Exercise Price |
|  |  |  | Outstanding |  |  | Vested |  |  | Outstanding |  |  | Vested |  |  | Outstanding |  |  | Vested |
$5.27 | - | 5.62 |  |  | 4,500 |  |  |  | 4,500 |  |  |  | 4.71 |  |  |  | 4.71 |  |  | $ | 5.46 |  |  | $ | 5.46 |
| $6.10 |  |  |  | 15,000 |  |  |  | 0 |  |  |  | 8.37 |  |  |  | - |  |  | $ | 6.10 |  |  |  | - |
| $9.81 |  |  |  | 25,000 |  |  |  | 25,000 |  |  |  | 1.54 |  |  |  | 1.54 |  |  | $ | 9.81 |  |  | $ | 9.81 |
|  |  |  |  | 44,500 |  |  |  | 29,500 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
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. In fiscal 2015, the Company amended the Purchase Plan by increasing the aggregate number of shares of stock reserved for issuance or transfer under the Plan by an additional 300,000 shares so that the total number of shares of stock reserved for issuance or transfer under the Plan shall be 1,100,000 shares and by extending the expiration date of the Plan to December 31, 2025. During the fiscal years ended January 2, 2016 and January 3, 2015, there were 73,048 and 67,092 shares issued under the Purchase Plan for net proceeds of $373 and $339, respectively. As of January 2, 2016, there were 349,436 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 2, 2016 and January 3, 2015 was $111 and $114, respectively.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51659978&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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