Stock-Based Compensation

3 Months Ended

Jun. 27, 2020

Share-based Payment Arrangement [Abstract]

The Company maintains stock incentive plans whereby stock option grants or awards of restricted stock may be made to certain officers, directors and key employees. The plans, which are shareholder approved, permit the award of up to 1,650,000 shares of the Company's common stock, of which 246,157 shares were still available for grant as of June 27, 2020. Upon option exercise, new shares of the Company's common stock are issued and when restricted stock vests, restricted stock shares issued become unrestricted. Awards may not be granted below 100% of the fair market value of the Company's common stock at the date of grant and generally expire seven years from the date of grant. Stock options and awards of restricted stock vest over a defined period or based on certain performance criteria, as determined by the plan administrator (the Compensation Committee of the Board of Directors, which consists of independent directors), but typically is no more than five years. The stock incentive plans provide for accelerated vesting of stock options and removal of restrictions on restricted stock awards upon a change in control (as defined in the plans).

Stock-based compensation charged against income for the three months ended June 27, 2020 and June 29, 2019 was $945,000 and $630,000, respectively.

As of June 27, 2020, total unrecognized compensation cost related to stock options was approximately $5.7 million and the related weighted-average period over which it is expected to be recognized is approximately 2.49 years.

Stock Options. The fair value of each stock option award is estimated on the date of the grant using the Black-Scholes-Merton option pricing model, which requires the input of assumptions. The Company estimates the risk-free interest rate based on the U.S. Treasury security rate in effect at the time of the grant. The expected life of the options, volatility and dividend rates are estimated based on historical data.

The following table summarizes stock option activity for the three months ended June 27, 2020:


			Number of Options
Outstanding at March 28, 2020			364,174
Granted			15,250
Exercised			(9,100)
Canceled or expired			(6,200)
Outstanding at June 27, 2020			364,124
Exercisable at June 27, 2020			194,058

Restricted Stock Awards. The fair value of restricted stock awards is estimated as the closing price of the Company's common stock on the date of grant. A summary of restricted stock award activity is as follows:


	Number of Shares
	Performance-Based Awards	Service-Based Awards	Total
Outstanding at March 28, 2020	7,305	4,500	11,805
Awarded	7,300	—	7,300
Released	—	—	—
Canceled or expired	(350)	—	(350)
Outstanding at June 27, 2020	14,255	4,500	18,755
Unvested target stock awards that vest based upon performance conditions through fiscal year 2022	6,955
Unvested target stock awards that vest based upon performance conditions through fiscal year 2023	7,300