Share-Based Compensation

Performance-Based Restricted Stock Units. Our Board of Directors has approved a performance-based equity compensation arrangement for our executive officers. This performance-based arrangement provides for the grant of performance-based restricted stock units that represent a possible future issuance of restricted shares of our common stock based on our pre-tax income target for the applicable fiscal year. The actual number of restricted shares to be issued to each executive officer will be determined when our final financial information becomes available after the applicable fiscal year and will be between zero shares and 44,447 shares in the aggregate for fiscal 2016. The restricted shares issued will fully vest two years after the last day of the fiscal year on which the performance is based. We are recording the compensation expense for the outstanding performance share units and then-converted restricted stock over the life of the awards.

The following table represents the restricted stock activity for fiscal 2016:



	Shares		Weighted- Average Grant Date Fair Value
Outstanding at beginning of year	53,580		$	37.55
Granted	37,309		40.89
Vested	(53,580	)	37.55
Forfeited or expired	—		—
Outstanding at end of year	37,309		$	40.89

The weighted average grant date fair value of restricted shares issued in fiscal 2016, 2015 and 2014 was $40.89, $34.45, and $40.25, respectively. We recorded compensation expense on performance-based restricted stock of approximately $1.2 million for fiscal 2016, $1.1 million for fiscal 2015 and $0.8 million for fiscal 2014, substantially all of which was recorded in selling, general and administrative (“SG&A”) expense in the Consolidated Statements of Income. The total fair value of performance-based restricted stock units vested in fiscal 2016 was $2.0 million compared to $0.8 million in fiscal 2015 and $1.3 million in fiscal 2014.

Until the performance-based restricted stock units result in the issuance of restricted stock, the amount of expense recorded each period is dependent upon our estimate of the number of shares that will ultimately be issued and our then current common stock price. Upon issuance of restricted stock, we record compensation expense over the remaining vesting period using the award date closing price. Unrecognized compensation expense related to non-vested restricted stock and non-vested restricted share units as of April 3, 2016 was $1.2 million and is expected to be recognized over a weighted average period of 1.4 years.

The benefits of tax deductions that vary from the recognized compensation costs from share-based compensation are recorded as a change in additional paid-in capital rather than a deduction of taxes paid. The amount of excess tax benefit (expense) recognized and recorded in additional paid-in capital resulting from share-based compensation cost was nominal in fiscal 2016, $1.0 million in fiscal 2015 and $(0.2) million in 2014.

Restricted Stock Awards. As part of their retainer, our non-employee directors receive restricted stock for their Board services. The restricted stock awards are expensed over the requisite vesting period, which begins on the date of issuance and ends on the date of the next Annual Meeting of Shareholders, based on the market value on the date of grant. The following table represents the Board’s restricted stock activity for fiscal 2016:



	Shares		Weighted- Average Grant Date Fair Value
Outstanding at beginning of year	7,077		$	34.61
Granted	6,804		36.00
Vested	(7,077	)	34.61
Forfeited or expired	—		—
Outstanding at end of year	6,804		$	36.00

Annual expense related to the value of restricted stock was $0.2 million for each of fiscal 2016, 2015 and 2014, all of which was recorded in SG&A expense in the Consolidated Statements of Income. Unrecognized compensation expense related to non-vested restricted stock awards as of April 3, 2016 was $0.1 million and is expected to be recognized over a weighted average period of 0.3 years.

Stock Option Awards. Our Board of Directors (the “Board”) previously approved a long-term incentive equity compensation arrangement for our executive officers that provided for the grant of non-qualified stock options that vested at the end of a three-year period, although no stock options have been granted under this arrangement since the fiscal year ended March 28, 2010. During fiscal 2015, 9,333 options were exercised with an exercise price of $19.90. As of April 3, 2016 we had no stock options outstanding. No expense was recorded in fiscal 2016, 2015 or 2014 related to the value of stock options.