STOCK-BASED COMPENSATION

3 Months Ended

Jun. 25, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

NOTE 3 – STOCK-BASED COMPENSATION

The Transcat, Inc. 2003 Incentive Plan, as Amended and Restated (the “2003 Plan”), provides for, among other awards, grants of restricted stock units and stock options. At June 24, 2017, the number of shares available for future grant under the 2003 Plan totaled 1.1 million.

Restricted Stock Units: The Company grants performance-based restricted stock units as a primary component of executive compensation. The units generally vest following the third fiscal year from the date of grant subject to certain cumulative diluted earnings per share growth targets over the eligible period. Compensation cost ultimately recognized for performance-based restricted stock units will equal the grant date fair market value of the unit that coincides with the actual outcome of the performance conditions. On an interim basis, the Company records compensation cost based on the estimated level of achievement of the performance conditions.

The Company achieved 50% of the target level for the performance-based restricted stock units granted in the fiscal year ended March 28, 2015 and as a result, issued 25 shares of common stock to executive officers and certain key employees during the first quarter of fiscal year 2018. The following table summarizes the non-vested performance-based restricted stock units outstanding as of June 24, 2017:

			Grant
		Total	Date		Estimated
		Number	Fair		Level of
Date	Measurement	of Units	Value		Achievement at
Grante	Period	Outstanding	Per Unit		June 24, 2017
April 2015	April 2015 - March 2018	63	$	9.59	50% of target level
April 2016	April 2016 - March 2019	84	$	10.13	100% of target level
April 2017	April 2017 – March 2020	77	$	12.90	100% of target level
June 2017	July 2017 – June 2020	3	$	12.00	100% of target level

Total expense relating to performance-based restricted stock units, based on grant date fair value and the achievement criteria, was $0.2 million and $0.1 million in the first quarter of fiscal years 2018 and 2017, respectively. As of June 24, 2017, unearned compensation, to be recognized over the grants’ respective service periods, totaled $1.5 million.

Stock Options: Options generally vest over a period of up to four years, using either a graded schedule or on a straight-line basis, and expire up to ten years from the date of grant. The expense relating to options is recognized on a straight-line basis over the requisite service period for the entire award.

The following table summarizes the Company’s options as of and for the first quarter ended June 24, 2017:

			Weighted		Weighted
			Average		Average
	Number		Exercise		Remaining	Aggregate
	of		Price Per		Contractual	Intrinsic
	Shares		Share		Term (in years)	Value
Outstanding as of March 25, 2017	241		$	7.48
Granted	165			12.00
Exercised	(75	)		7.34
Redeemed	(20	)		7.72
Outstanding as of June 24, 2017	311		$	9.89	5	$	689
Exercisable as of June 24, 2017	251		$	10.44	4	$	417

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the first quarter of fiscal year 2018 and the exercise price, multiplied by the number of in-the-money stock options) that would have been received by the option holders had all holders exercised their options on June 24, 2017. The amount of aggregate intrinsic value will change based on the fair market value of the Company’s common stock.

Total expense related to stock options was $0.3 and $0.1 million during the first quarter of fiscal years 2018 and 2017, respectively. Total unrecognized compensation cost related to non-vested stock options as of June 24, 2017 was less than $0.1 million, which is expected to be recognized over a weighted average period of one year. The aggregate intrinsic value of stock options exercised in the first quarter of fiscal year 2018 was $0.4 million. Cash received from the exercise of options in the first quarter of fiscal year 2018 was $0.6 million.