XML 56 R13.htm IDEA: XBRL DOCUMENT

STOCK OPTIONS

12 Months Ended

Jun. 28, 2015

STOCK OPTIONS

STOCK OPTIONS {1}

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 were eligible to receive options to purchase shares of the Company’s common stock. Options were granted at market value of the stock on the date of grant, were subject to various vesting and exercise periods as determined by the Compensation Committee of the board of directors, and could be designated as non-qualified or incentive stock options. A total of 1,000,000 shares of common stock were authorized for issuance under the 2005 Employee Plan. During the 2015 fiscal year, options to purchase 92,000 shares were granted under the 2005 Employee Plan. Also during the 2015 fiscal year, 3,000 shares of common stock were issued upon the exercise of options granted under the 2005 Employee Plan. The 2005 Employee Plan expired by its terms on June 23, 2015.

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 were 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, were automatically granted to each non-employee director on the first day of each fiscal year. Options were 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 650,000 shares of Company common stock were authorized for issuance pursuant to the 2005 Directors Plan. During the 2015 fiscal year, 28,800 options were granted under the 2005 Directors Plan. Also during the 2015 fiscal year, 167,200 shares of common stock were issued upon the exercise of options granted under the 2005 Directors Plan. The 2005 Directors Plan expired by its terms on June 23, 2015.

The 2015 Long Term Incentive Plan (the “2015 LTIP”) was approved by the Company’s shareholders on November 18, 2014, and became effective June 1, 2015. Officers, employees and non-employee directors of the Company are eligible to receive awards under the 2015 LTIP. A total of 1,200,000 shares of common stock are authorized for issuance under the 2015 LTIP. Awards authorized under the 2015 LTIP include incentive stock options, non-qualified stock options, restricted shares, restricted stock units and rights (either with or without accompanying options). The 2015 LTIP provides for options to be granted at market value of the stock on the date of grant and have exercise periods determined by the Compensation Committee of the board of directors. The Compensation Committee may also determine the vesting periods, performance criteria and other terms and conditions of all awards under the 2015 LTIP. As of June 28, 2015, no awards had been granted under the 2015 LTIP.

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:

		Fiscal Year Ended
		June 28, 2015								June 29, 2014
						Weighted-								Weighted-
						Average								Average
						Exercise								Exercise
		Shares				Price				Shares				Price

Outstanding at beginning
of year			921,198			$	2.92				851,306			$	2.54

Granted			120,800			$	6.57				147,892			$	4.92
Exercised			(170,200	)		$	2.50				(39,144	)		$	2.12
Forfeited/Canceled/Expired			-			$	-				(38,856	)		$	3.15

Outstanding at end of year			871,798			$	3.51				921,198			$	2.92

Exercisable at end of year			406,378			$	2.63				473,659			$	2.43

Weighted-average fair value of
options granted during the year						$	3.16							$	3.64

Total intrinsic value of
options exercised						$	425,944							$	82,845

At June 28, 2015, the total intrinsic value of options outstanding was $8.6 million and of options exercisable was $4.3 million.

The following table provides information on options outstanding and options exercisable as of June 28, 2015:

				Options Outstanding												Options Exercisable
								Weighted-
								Average
				Options				Remaining				Weighted-				Options				Weighted-
Range of				Outstanding				Contractual				Average				Exercisable				Average
Exercise Prices				at June 28, 2015				Life (Years)				Exercise Price				at June 28, 2015				Exercise Price

$	1.55 - 1.95				81,306				4.1			$	1.90				81,306			$	1.90
$	1.96 - 2.35				90,000				3.0			$	2.32				90,000			$	2.32
$	2.36 - 2.75				397,000				7.2			$	2.57				145,000			$	2.60
$	2.76 - 3.30				55,000				7.0			$	3.11				55,000			$	3.11
$	3.31 - 3.81				41,528				7.5			$	3.81				12,458			$	1.52
$	5.51 - 5.74				8,664				8.0			$	5.74				8,664			$	5.74
$	5.95 - 6.25				153,300				8.9			$	6.06				12,450			$	6.02
$	6.26 - 8.16				45,000				8.9			$	8.09				1,500			$	8.16
					871,798				6.9			$	3.51				406,378			$	2.63

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 in the last two fiscal years:

		June 28,				June 29,
Fiscal Year Ended		2015				2014

Expected life (in years)			5.9				6.0
Expected volatility			39.1	%			42.8	%
Risk-free interest rate			1.9	%			1.5	%
Expected forfeiture rate			47.1	%			58.2	%

The share based compensation expense is included in general and administrative expense in the statement of operations.

At June 28, 2015, the Company had unvested options to purchase 465,420 shares with a weighted average grant date fair value of $2.66. The total remaining unrecognized compensation cost related to unvested awards amounted to approximately $0.4 million at June 28, 2015. The weighted average remaining requisite service period of the unvested awards was 15.1 months. Stock compensation expense of $0.1 million was recognized in each of fiscal years 2015 and 2014.

The entire disclosure for freestanding option contracts issued by an entity that are indexed to, and potentially settled in, an entity's own stock. Includes disclosure on the strike price and the number of shares to which the contract is indexed, the settlement date or dates of the contract, and the issuer's accounting for the contract. If the terms of the contract provide settlement alternatives, those settlement alternatives are disclosed, including who controls the settlement alternatives, and the maximum number of shares that could be required to be issued, to net share settle the contract, if applicable. If a contract does not have a fixed or determinable maximum number of shares that could be required to be issued, the fact that a potentially infinite number of shares that may be required to be issued to settle the contract is disclosed. Disclosure also includes the contract's current fair value for each settlement alternative and how changes in the price of the issuer's equity instruments affect those settlement amounts.

+ References + Details