NOTE 14: Stock Compensation Plans

The Company had two share-based compensation plans as of November 3, 2013, the 2006 Plan and 1995 Plan, which are discussed below. There were 900,850 shares available for future grants at November 3, 2013.

2006 Plan

The shareholders of the Company approved the Volt Information Sciences, Inc. 2006 Incentive Stock Plan (2006 Plan) in April 2007. The 2006 Plan permits the grant of Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock and Restricted Stock Units related to the Company’s common stock to employees and nonemployee directors of the Company through September 6, 2016.

The aggregate number of shares that may be issued pursuant to awards made under the 2006 Plan shall not exceed 1,500,000 shares and the options will be granted at a price of no less than 100% of the fair market value of the Company’s common stock at the date of grant.

On December 18, 2007, the Company granted to employees (i) 233,000 restricted stock units with a weighted average grant date fair value of $13.32 and (ii) non-qualified stock options to purchase 152,996 shares of the Company’s common stock at a weighted average exercise price of $13.32 per share under the 2006 Plan. If certain net income targets were met in fiscal years 2007 through 2011, the restricted stock units would begin to vest over a five-year period through 2016. Similarly, if certain net income targets were met in fiscal years 2008 through 2012, substantially all the stock options would vest over a four-year period through 2016. There was no compensation expense recognized on the grants with net income targets for the fiscal years 2013, 2012, and 2011 because the achievement was not deemed probable. These targets were not met and these restricted stock units and options were forfeited in October 2011 and October 2012, respectively.

On May 11, 2011, the Company granted non-qualified stock options to purchase 15,000 shares of the Company’s stock under the 2006 Plan. These options are time based and vest over a five year period.

On August 2, 2011, the Company granted non-qualified stock options to purchase 7,000 shares of the Company’s common stock under the 2006 Plan. If certain performance targets were not met during fiscal 2012, these options would forfeit at a rate of 20% over a ten week period. The targets were not met and the options forfeited in fiscal 2012.

During fiscal 2013, the Company granted 110,000 shares of the Company’s common stock as restricted stock awards under the 2006 Plan. The weighted average fair value for these shares at the grant date was $7.16. Compensation expense is recognized on a straight-line basis over the vesting period of 2.5 years.

Compensation expense of $0.4 million was recognized in the Selling, Administrative and Other operating costs in the Company’s Consolidated Statement of Operations for the year ended November 3, 2013. As of November 3, 2013, there was $0.5 million of total unrecognized compensation cost related to these restricted shares to be recognized over a weighted average period of 1.8 years, all of which relates to the 2006 Plan.

The following table summarizes transactions involving outstanding stock options and non-vested restricted stock and restricted stock unit awards (stock awards) under the 2006 plan:


	Stock Options								Restricted Stock
2006 Plan	Number of shares		Weighted average exercise price		Weighted average contractual life		Aggregate Intrinsic Value		Number of shares		Weighted average grant date fair value

					(in years)		(in thousands)
Outstanding - October 31, 2010		749,783	$	7.48		8.21	$	1,059		189,142	$	13.32
Granted		22,000		10.06		-		-		-		-
Expired		(5,600)		6.39		-		-		-		-
Forfeited		(51,166)		8.34		-		-		(189,142)		13.32

Outstanding - October 30, 2011		715,017		7.51		7.31		232		-		-
Granted		-		-		-		-		-		-
Expired		(27,800)		6.39		-		-		-		-
Forfeited		(149,267)		11.25		-		-		-		-

Outstanding - October 28, 2012		537,950		6.53		6.43		314		-		-
Granted		-		-		-		-		110,000		7.16
Expired		(28,700)		6.39		-		-		-		-
Forfeited		(25,100)		7.22		-		-		-		-
Vested		-		-		-		-		(36,666)		6.25

Outstanding - November 3, 2013		484,150	$	6.50		5.42	$	1,041		73,334	$	7.61

Expected to vest at November 3, 2013		87,450	$	6.55		5.50	$	185		73,334	$	7.61

Exercisable at November 3, 2013		396,700	$	6.49		5.40	$	856

1995 Plan

In 1995, the Company adopted a Non-Qualified Stock Option Plan (1995 Plan) pursuant to which the Company’s Board of Directors could grant stock options to the key employees of the Company or of any subsidiary of the Company. The 1995 Plan terminated on May 16, 2005 pursuant to its terms. Options to purchase shares of common stock previously granted under the plan will remain outstanding until exercised, cancelled, forfeited or expired.

The following table summarizes transactions involving outstanding stock options under the 1995 plan:


	Number of shares		Weighted average exercise price		Weighted average contractual life		Aggregate Intrinsic Value
1995 Plan
					(in years)		(in thousands)
Outstanding - October 31, 2010		46,050	$	12.14		1.90	$	13
Exercised		-		-		-		-
Expired		(17,400)		12.03		-		-

Outstanding - October 30, 2011		28,650		12.21		1.39		-
Exercised		-		-		-		-
Expired		(10,950)		10.42		-		-

Outstanding - October 28, 2012		17,700		13.31		1.01		-
Exercised		-		-		-		-
Expired		(10,200)		9.27		-		-

Outstanding - November 3, 2013		7,500		18.81		0.76	$	-

Vested and exercisable at November 3, 2013		7,500	$	18.81		0.76	$	-

In calculating share-based compensation costs, the Company estimated the fair value of each stock option grant using the Black-Scholes option-pricing model. There were no option grants in fiscal 2013 and 2012. The assumptions used to estimate the fair value stock options were as follows for the 2011 fiscal year:


	October 30, 2011
Weighted-average fair value of stock option granted	$	7.06
Expected volatility		59%
Expected term (in years)		10
Risk-free interest rate		3.0
Expected dividend yield		0

Share based compensation expense was recognized in Selling, Administrative and Other Operating Costs in the Company’s Consolidated Statements of Operations as follows (in thousands):


	Year ended
	November 3, 2013		October 28, 2012		October 30, 2011
2006 Stock Incentive Plan
Selling, administrative and other operating costs	$	416	$	127	$	460

Total	$	416	$	127	$	460