NOTE 8—STOCK-BASED COMPENSATION

The 2019 Stock Incentive Plan (the “2019 Plan”) was approved by the Company’s stockholders at the March 2019 Annual Meeting. The 2019 Plan replaced the 2010 Omnibus Incentive Compensation Plan (“2010 Plan”) that was approved by the Company’s stockholders at the January 2011 Annual Meeting. The 2019 Plan, like the 2010 Plan, is administered by the Compensation Committee of the Board of Directors and provides for the following types of awards: incentive stock options, nonqualified options, stock appreciation rights, restricted shares, restricted stock units, performance compensation awards, cash incentive awards, director stock and other equity-based and equity-related awards. Awards are generally granted to certain members of management and employees, as well as directors. The Company also has an ESPP, adopted in 2011, that provides for the purchase of Company common stock at a discounted stock purchase price. Under the 2019 Plan, 840,360 shares of common stock, plus any shares that are subject to awards granted under the 2010 Plan that expire, are forfeited or canceled without the issuance of shares (other than shares used to pay the exercise price of a stock option under the 2010 Plan and shares used to cover the tax withholding of the award under the 2010 Plan) may be issued over a term of ten years. Under the ESPP, 150,000 shares of common stock may be issued over a term of ten years.

Stock-based compensation expense recorded under the 2010 Plan and the 2019 Plan, totaled $0.2 million and $0.1 million for the three months ended December 27, 2019 and December 28, 2018, respectively.

At December 27, 2019, there were 726,775 shares of common stock remaining available to be issued under the 2019 Plan and 83,252 shares of common stock remaining available to be issued under the ESPP.

Expenses relating to stock options that comply with certain U.S. income tax rules are neither deductible by the Company nor taxable to the employee. Further information regarding awards granted under the 2010 Plan and ESPP is provided below.

Stock Options

When options are granted, IEC estimates fair value using the Black-Scholes option pricing model and recognizes the computed value as compensation cost over the vesting period, which is typically four years. The contractual term of options granted under the 2010 Plan and 2019 Plan is generally seven years. The volatility rate is based on the historical volatility of IEC's common stock.

There were no options granted during the three months ended December 27, 2019 and December 28, 2018.

A summary of stock option activity, together with other related data, follows:



	Three Months Ended
	December 27, 2019				December 28, 2018
Stock Options	Number of Options		Wgtd. Avg. Exercise Price		Number of Options		Wgtd. Avg. Exercise Price

Outstanding, beginning of period	743,145		$	4.54	737,145		$	4.33
Granted	—		—		—		—
Exercised	(24,000	)	5.42		(11,500	)	3.99
Forfeited	(10,000	)	3.58		(17,500	)	3.61
Expired	(5,000	)	6.91		(5,000	)	4.08
Outstanding, end of period	704,145		$	4.51	703,145		$	4.35

For options expected to vest
Number expected to vest	695,555		$	4.49	693,289		$	4.34
Weighted average remaining contractual term, in years	3.5				3.8
Intrinsic value (000s)			$	3,283			$	1,008

For exercisable options
Number exercisable	541,645		$	4.16	420,858		$	4.24
Weighted average remaining contractual term, in years	2.4				3.1
Intrinsic value (000s)			$	2,738			$	664

For non-exercisable options
Expense not yet recognized (000s)			$	304			$	269
Weighted average years to be recognized	3.0				2.9

For options exercised
Intrinsic value (000s)			$	64			$	23

Restricted (Non-vested) Stock

Certain holders of IEC restricted stock have voting and dividend rights as of the date of grant, and, until vested, the shares may be forfeited and cannot be sold or otherwise transferred. At the end of the vesting period, which is typically four or five years (three years in the case of directors), holders have all the rights and privileges of any other common stockholder of the Company. The fair value of a share of restricted stock is its market value on the date of grant, and that value is recognized as stock compensation expense over the vesting period.

A summary of restricted stock activity, together with related data, follows:



	Three Months Ended
	December 27, 2019				December 28, 2018
Restricted (Non-vested) Stock	Number of Non-vested Shares		Wgtd. Avg. Grant Date Fair Value		Number of Non-vested Shares		Wgtd. Avg. Grant Date Fair Value

Outstanding, beginning of period	82,707		$	5.25	103,233		$	4.08
Granted	—		—		—		—
Vested	(10,000	)	3.60		(7,500	)	3.60
Forfeited	—		—		(1,400	)	4.13
Outstanding, end of period	72,707		$	5.48	94,333		$	4.12

For non-vested shares
Expense not yet recognized (000s)			$	295			$	274
Weighted average remaining years for vesting	1.9				1.5

For shares vested
Aggregate fair value on vesting dates (000s)			$	66			$	40

Stock Issued to Board Members

In addition to annual grants of restricted stock, included in the table above, board members may elect to have their meeting fees paid in the form of shares of the Company’s common stock. The Company has not paid any meeting fees in stock since May 21, 2013.

Restricted Stock Units

Holders of IEC restricted stock units do not have voting and dividend rights as of the date of grant, and, until vested, the unit may be forfeited and cannot be sold or otherwise transferred. At the end of the vesting period, which is typically three years, holders will receive shares of the Company's common stock and have all the rights and privileges of any other common stockholder of the Company. The fair value of a restricted stock unit is the market value of the underlying shares of the Company's stock on the date of grant and that value is recognized as stock compensation expense over the vesting period.

A summary of restricted stock unit activity, together with related data, follows:



	Three Months Ended
	December 27, 2019			December 28, 2018
Restricted Stock Units	Number of Non-vested Units	Wgtd. Avg. Grant Date Fair Value		Number of Non-vested Units	Wgtd. Avg. Grant Date Fair Value

Outstanding, beginning of period	153,186	$	5.36	170,492	$	3.96
Granted	—	—		—	—
Vested	—	—		—	—
Forfeited	—	—		—	—
Outstanding, end of period	153,186	$	5.36	170,492	$	3.96

For non-vested shares
Expense not yet recognized (000s)		$	603		$	322
Weighted average remaining years for vesting	2.0			2.1