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Note 8 - Shareholders' Equity
 3 Months Ended
Mar. 29, 2015
Note 8 - Shareholders Equity  
Shareholders' Equity

8.SHAREHOLDERS’ EQUITY

 

We recorded non-cash stock compensation expense in each period as follows:

 

   Three month periods ended
   March 29,  March 30,
   2015  2014
Stock options  $120   $123 
Restricted stock grants:          
    Employee   24      
    President and CEO        49 
Board of directors compensation – stock grant        57 
     Total  $144   $229 

 

These are more fully discussed as follows:

 

a. Stock Options

 

We have stock options outstanding from various stock-based employee compensation plans for which we record compensation cost relating to share-based payment transactions in our financial statements. As of March 29, 2015, there was $545 of total unrecognized compensation cost related to outstanding stock options, which is expected to be recognized over a weighted average period of 1.3 years.

 

The following table summarizes stock option activity for the first quarter of 2015:

 

 

   Number of Shares  Weighted Average Exercise Price  Weighted Average Remaining Contractual Term (years)  Aggregate Intrinsic Value
Outstanding at January 1, 2015   2,056,122   $6.66           
Granted   277,000    3.72           
Exercised   (2,667)   3.22           
Forfeited or expired   (52,999)   12.22           
Outstanding at March 29, 2015   2,277,456    6.17    4.04   $202 
Vested and expected to vest at                    
   March 29, 2015   2,126,019    6.34    3.89   $168 
Exercisable at March 29, 2015   1,338,129   $5.25    3.08   $79 

 

The following assumptions were used to value stock options granted during the first quarter of 2015:

    
Risk-free interest rate   1.35%
Volatility factor   47.3%
Dividends   0.00%
Weighted average expected life (years)   4.15 

 

FASB’s guidance for share-based payments requires cash flows from excess tax benefits to be classified as a part of cash flows from financing activities. Excess tax benefits are realized tax benefits from tax deductions for exercised stock options in excess of the deferred tax asset attributable to stock compensation costs for such stock options. We did not record any excess tax benefits in the first three months of 2015 or 2014. Cash received from stock option exercises under our stock-based compensation plans for the three-month periods ended March 29, 2015 and March 30, 2014 was $8 and $0, respectively.

 

c. Restricted Stock Awards

 

Our President and Chief Executive Officer holds 60,000 unearned, unvested restricted stock units at March 29, 2015, and an additional 30,000 of his restricted stock units vested during the three-month period ended March 29, 2015.

 

In addition, 49,200 shares of restricted stock were awarded to certain of our employees in September, 2014. There is $106 of unrecognized compensation cost related to these restricted shares at March 29, 2015.