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Stock Options | 12 Months Ended
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Jun. 30, 2013
Stock Options |
Stock Options | NOTE H - STOCK OPTIONS: In June 2005, the 2005 Employee Incentive Stock Option Award Plan (the “2005 Employee Plan”) was approved by the Company’s shareholders with a plan effective date of June 23, 2005. Under the 2005 Employee Plan, officers and employees of the Company are eligible to receive options to purchase shares of the Company’s common stock. Options are granted at market value of the stock on the date of grant, are subject to various vesting and exercise periods as determined by the Compensation Committee of the Board of Directors, and may be designated as non-qualified or incentive stock options. A total of 1,000,000 shares of common stock are authorized for issuance under the 2005 Employee Plan. During the 2013 fiscal year, options to purchase 389,800 shares were granted under the 2005 Employee Plan. As of June 30, 2013, there were 582,200 shares available to be granted under the plan. The shareholders also approved the 2005 Non-Employee Directors Stock Award Plan (the “2005 Directors Plan”) in June 2005, to be effective as of June 23, 2005. Directors not employed by the Company are eligible to receive stock options under the 2005 Directors Plan. Options for common stock equal to twice the number of shares of common stock acquired during the previous fiscal year, up to 40,000 shares per year, are automatically granted to each non-employee director on the first day of each fiscal year. Options are granted at market value of the stock on the first day of each fiscal year, with vesting periods beginning at a minimum of six months and with exercise periods up to ten years. A total of 500,000 shares of Company common stock are authorized for issuance pursuant to the 2005 Directors Plan. During the 2013 fiscal year, 75,000 options were granted under the 2005 Directors Plan, all of which were outstanding at June 30, 2013. As of June 30, 2013, there were 66,494 shares available to be issued under the plan. A summary of stock option transactions under all of the Company’s stock option plans and information about fixed-price stock options is as follows:
|  | Year Ended |
|  | June 30, 2013 |  |  | June 24, 2012 |
|  |  |  |  | Weighted- |  |  |  |  |  | Weighted- |
|  |  |  |  | Average |  |  |  |  |  | Average |
|  |  |  |  | Exercise |  |  |  |  |  | Exercise |
|  | Shares |  |  | Price |  |  | Shares |  |  | Price |
Outstanding at beginning |  |  |  |  |  |  |  |  |  |  |  |
of year |  |  | 486,506 |  |  | $ | 2.80 |  |  |  | 604,036 |  |  | $ | 2.30 |
Granted |  |  | 464,800 |  |  | $ | 2.70 |  |  |  | 169,032 |  |  | $ | 4.22 |
Exercised |  |  | - |  |  |  |  |  |  |  | (10,000 | ) |  | $ | 2.45 |
Forfeited/Canceled/Expired |  |  | (100,000 | ) |  | $ | 4.72 |  |  |  | (276,562 | ) |  | $ | 2.39 |
Outstanding at end of year |  |  | 851,306 |  |  | $ | 2.54 |  |  |  | 486,506 |  |  | $ | 2.80 |
Exercisable at end of year |  |  | 459,439 |  |  | $ | 2.42 |  |  |  | 319,528 |  |  | $ | 2.23 |
Weighted-average fair value of |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
options granted during the year |  |  |  |  |  | $ | 1.29 |  |  |  |  |  |  | $ | 1.90 |
Total intrinsic value of |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
options exercised |  |  |  |  |  | $ | - |  |  |  |  |  |  | $ | 38,320 |
At June 30, 2013, the total intrinsic value of options outstanding was $2.7 million and of options exercisable was $1.5 million. The following table provides information on options outstanding and options exercisable as of June 30, 2013:
|  | Options Outstanding |  | Options Exercisable
|  |  |  | Weighted- |  |  |  |  |  |
|  |  |  | Average |  |  |  |  |  |
|  | Shares |  | Remaining |  | Weighted- |  | Shares |  | Weighted-
Range of |  | Outstanding |  | Contractual |  | Average |  | Exercisable |  | Average
Exercise Prices |  | at June 30, 2013 |  | Life (Years) |  | Exercise Price |  | at June 30, 2013 |  | Exercise Price
$1.55 - 1.95 |  | 158,506 |  | 6.3 |  | $1.88 |  | 145,839 |  | $1.88
$1.96 - 2.35 |  | 145,000 |  | 5.1 |  | $2.29 |  | 145,000 |  | $2.29
$2.36 - 2.75 |  | 366,800 |  | 9.2 |  | $2.58 |  | 52,000 |  | $2.71
$2.76 - 3.30 |  | 131,000 |  | 7.5 |  | $3.13 |  | 116,600 |  | $3.13
$3.31 - 3.81 |  | 50,000 |  | 9.4 |  | $3.62 |  | - |  | N/A
|  | 851,306 |  | 7.1 |  | $2.54 |  | 459,439 |  | $2.42
We determine fair value following the authoritative guidance as follows: Valuation and Amortization Method. We estimate the fair value of share-based awards granted using the Black-Scholes option valuation model. We amortize the fair value of all awards on a straight-line basis over the requisite service periods, which are generally the vesting periods. Expected Life. The expected life of awards granted represents the period of time that they are expected to be outstanding. Unless a life is specifically stated, we determine the expected life using the “simplified method” in accordance with Staff Accounting Bulletin No. 110 since we do not have sufficient historical share option exercise experience. Expected Volatility. Using the Black-Scholes option valuation model, we estimate the volatility of our common stock at the date of grant based on the historical volatility of our common stock. Risk-Free Interest Rate. We base the risk-free interest rate used in the Black-Scholes option valuation model on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award. Expected Dividend Yield. We have not paid any cash dividends on our common stock in the last ten years and we do not anticipate paying any cash dividends in the foreseeable future. Consequently, we use an expected dividend yield of zero in the Black-Scholes option valuation model. Expected Forfeitures. We use historical data to estimate pre-vesting option forfeitures. We record stock-based compensation only for those awards that are expected to vest. The following weighted average assumptions were used for options granted or had options been granted:
|  | June 30, |  |  | June 24, |
Fiscal Years Ended |  | 2013 |  |  | 2012 |
Expected life (in years) |  |  | 6.0 |  |  |  | 5.8 |
Expected volatility |  |  | 48.9 | % |  |  | 46.2 | %
Risk-free interest rate |  |  | 1.1 | % |  |  | 1.3 | %
Expected forfeiture rate |  |  | 61.8 | % |  |  | 17.3 | %
The share based compensation expense is included in general and administrative expense in the statement of operations. At June 30, 2013, the Company had unvested options to purchase 391,867 shares with a weighted average grant date fair value of $1.36. The total remaining unrecognized compensation cost related to unvested awards amounted to approximately $0.2 million at June 30, 2013. The weighted average remaining requisite service period of the unvested awards was 17.4 months. Stock compensation expense of $0.2 million and $0.1 million was recognized in fiscal years 2013 and 2012, respectively.

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- Definition The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. + References No definition available. + Details
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