Note 13 - Stock-Based Compensation

12 Months Ended

Jun. 29, 2014

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

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

Note 13. Stock Based Compensation

The Plan is administered by the Compensation Committee or such other Board committee (or the entire Board) as may be designated by the Board (the “Committee”). At June 29, 2014, the Company has reserved approximately 14.5 million shares of common stock for issuance, including options previously authorized for issuance under the 1999 Stock Incentive Plan.

The amounts of stock-based compensation expense recognized in the periods presented are as follows:

	Years Ended
	July 29, 2014		June 30, 2013		July 1, 2012
	(in thousands, except per share data)
Stock options	$	420	$	477	$	1,073
Restricted stock awards		4,244		3,806		3,777
Total		4,664		4,283		4,850
Deferred income tax benefit		1,738		1,555		1,796
Stock-based compensation expense, net	$	2,926	$	2,728	$	3,054

Stock based compensation expense is recorded within the following line items of operating expenses:

	Years Ended
	July 29, 2014		June 30, 2013		July 1, 2012
	(in thousands)
Marketing and sales	$	1,261	$	1,499	$	1,755
Technology and development		298		428		600
General and administrative		3,105		2,356		2,495
Total	$	4,664	$	4,283	$	4,850

Stock-based compensation expense has not been allocated between business segments, but is reflected as part of Corporate overhead. (Refer to Note 15. Business Segments).

Stock Option Plans 

The weighted average fair value of stock options on the date of grant, and the assumptions used to estimate the fair value of the stock options using the Black-Scholes option valuation model, were as follows:

	Years ended
	June 29, 2014		June 30, 2013		July 1, 2012
Weighted average fair value of options granted	$	3.16	$	2.95	$	1.84
Expected volatility		61%		72%		72%
Expected life (in years)		6.6		6.4		8.0
Risk-free interest rate		1.6%		0.7%		0.9%
Expected dividend yield		0.0%		0.0%		0.0%

The expected volatility of the option is determined using historical volatilities based on historical stock prices. The Company estimated the expected life of options granted based upon the historical weighted average. The risk-free interest rate is determined using the yield available for zero-coupon U.S. government issues with a remaining term equal to the expected life of the option. The Company has never paid a dividend, and as such the dividend yield is 0.0%.

The following table summarizes stock option activity during the year ended June 29, 2014:

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (000s)
Outstanding beginning of period		4,723,240		$	3.89
Granted		25,000		$	5.39
Exercised		(164,050	)	$	3.02
Forfeited/Expired		(244,400	)	$	6.34
Outstanding end of period		4,339,790		$	3.80		4.2	$	10,188
Options vested or expected to vest at end of period		4,232,111		$	3.83		4.2	$	9,827
Exercisable at June 29, 2014		2,886,790		$	4.52		2.8	$	5,269

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 fiscal 2014 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 29, 2014. This amount changes based on the fair market value of the Company’s stock. The total intrinsic value of options exercised for the years ended June 29, 2014, June 30, 2013 and July 1, 2012 was $0.4 million, $0.6 million, and $0.0 million, respectively.

The following table summarizes information about stock options outstanding at June 29, 2014:

			Options Outstanding						Options Exercisable
Exercise Price			Options Outstanding		Weighted- Average Remaining Contractual Life (years)		Weighted- Average Exercise Price		Options Exercisable		Weighted- Average Exercise Price
$1.69	–	1.79		1,013,500		6.3	$	1.79		382,500	$	1.79
$2.01	–	2.63		1,054,900		7.3	$	2.62		296,400	$	2.62
$2.87	–	3.11		1,041,303		2.0	$	3.10		1,029,803	$	3.10
$3.26	–	6.52		650,234		2.4	$	6.11		598,234	$	6.08
$6.90	–	9.95		579,853		1.0	$	8.09		579,853	$	8.09
				4,339,790		4.2	$	3.80		2,886,790	$	4.52

As of June 29, 2014, the total future compensation cost related to non-vested options not yet recognized in the statement of operations was $1.9 million and the weighted average period over which these awards are expected to be recognized was 4.8 years.

The Company grants shares of Common Stock to its employees that are subject to restrictions on transfer and risk of forfeiture until fulfillment of applicable service conditions and, in certain cases, holding periods (Restricted Stock).

The following table summarizes the activity of non-vested restricted stock during the year ended June 29, 2014:

	Shares			Weighted Average Grant Date Fair Value
Non-vested – beginning of period		3,433,355		$	2.80
Granted		1,760,918		$	5.09
Vested		(1,608,052	)	$	2.50
Forfeited		(899,536	)	$	4.52
Non-vested - end of period		2,686,685		$	3.90

The fair value of non-vested shares is determined based on the closing stock price on the grant date. As of June 29, 2014, there was $6.8 million of total unrecognized compensation cost related to non-vested restricted stock-based compensation to be recognized over a weighted-average period of 2.8 years.