Stock-based compensation plans

6 Months Ended

Apr. 04, 2015

Stock-based compensation plans [Abstract]

Stock-based compensation plans

(4)Stock-based compensation plans

Under the Company’s 1996 Equity Incentive Plan (the “Plan”) there were 139,578 shares reserved and available for grant at April 4, 2015. There were 183,400 shares reserved and available for grant at March 29, 2014. 

Recipients of grants must execute a standard form of non-competition agreement. The plan provides for the grant of Restricted Stock, Restricted Stock Units, Options, and Stock Appreciation Rights (“SARs”). SARs may be awarded either separately, or in relation to options granted, and for the grant of bonus shares. Options granted are exercisable at a price not less than fair market value on the date of grant.

There were no options outstanding or exercisable at April 4, 2015 or March 29, 2014, and there were no options granted or exercised in the three and six month periods ended April 4, 2015 and March 29, 2014.

In December 2014, the Company granted 42,000 shares of restricted stock to eight employees, which will vest in two equal annual installments so long as the employee is then employed by the Company or as determined by the Compensation Committee. The estimated fair value of the stock on the date of grant was $330,000 based on the fair market value of stock on the date of issue. This unvested compensation is being charged to income on a straight line basis over two years. The charge to income for this employee restricted stock in the first six months of 2015 was $41,000 and the subsequent charge will be approximately $41,000 on a quarterly basis.

In December 2014, the Company granted 20,000 shares of restricted stock to three employees, which will vest in five equal annual installments so long as the employee is then employed by the Company or as determined by the Compensation Committee. The estimated fair value of the stock on the date of grant was $139,000 based on the fair market value of stock on the date of issue. This unvested compensation is being charged to income on a straight line basis over five years. The charge to income for this employee restricted stock in the first six months of 2015 was $7,000 and the subsequent charge will be approximately $7,000 on a quarterly basis.

In February 2015, the Company granted 30,600 shares of restricted stock to nine non-employee directors, which will vest on the day before the 2016 annual meeting providing that the grantee remains a director of the Company, or as otherwise determined by the Compensation Committee. The aggregate fair value of the stock measured on the date of grant was $225,000, based on the closing sale price of the stock on the date of grant. Compensation expense is being charged to income on a straight line basis over the twelve month period during which the forfeiture conditions lapse. The charge to income for these restricted stock grants in the first six months of fiscal 2015 was $19,000 and the subsequent charge will be approximately $56,000 on a quarterly basis.

A summary of restricted stock activity for the six months ended April 4, 2015 is as follows:

	Number of shares of Restricted Stock			Weighted Average Grant-Date Fair Value
Non-vested balance as of September 30, 2014		168,600		$	5.27
Granted		92,600		$	7.68
Vested		(64,600	)	$	6.32
Non-vested balance as of April 4, 2015		196,600		$	6.07

Stock-based compensation expense was $146,000 and $259,000 for the three and six month periods ended April 4, 2015 and $68,000 and $127,000 for the three and six month periods ended March 29, 2014, respectively. At April 4, 2015, there was $1,071,000 of unrecognized compensation expense related to restricted stock granted under the Plan. The Company expects to recognize that cost over a weighted average period of 2.5 years.