2011 EQUITY INCENTIVE PLAN:

12 Months Ended

Mar. 29, 2019

Share-based Payment Arrangement [Abstract]

2011 EQUITY INCENTIVE PLAN

Note 8 2011 EQUITY INCENTIVE PLAN:

On August 31, 2011, the Company’s shareholders approved the adoption of the Company’s 2011 Equity Incentive Plan (“2011 Plan”) to provide for the grant of stock options and restricted stock awards to purchase up to 750,000 shares of the Company’s common stock to all employees, consultants and other eligible participants including senior management and members of the Board of Directors of the Company.

Options granted to employees under the 2011 Plan may be designated as options which qualify for incentive stock option treatment under Section 422A of the Internal Revenue Code, or options which do not qualify (non-qualified stock options).

Under the 2011 Plan, the exercise price of an option designated as an incentive stock option shall not be less than the fair market value of the Company’s common stock on the day the option is granted. In the event an option designated as an incentive stock option is granted to a ten percent (10%) or greater shareholder, such exercise price shall be at least 110 percent (110%) of the fair market value of the Company’s common stock and the option must not be exercisable after the expiration of ten years from the day of the grant. The 2011 Plan also provides that holders of options that wish to pay for the exercise price of their options with shares of the Company’s common stock must have beneficially owned such stock for at least six months prior to the exercise date.

Exercise prices of non-incentive stock options may be less than the fair market value of the Company’s common stock.

The aggregate fair market value of shares subject to options granted to a participant(s), which are designated as incentive stock options, and which become exercisable in any calendar year, shall not exceed $100,000.

Effective August 15, 2016, the Board of Directors also approved the granting of stock options to purchase shares of the Company’s common stock under the 2011 Plan to each of Dr. Marciano and Mr. Hugel as follows: Each of the new non-management directors received a grant of options totaling 5,000 shares each subject to the following vesting schedule: (i) 1,000 shares vested immediately (August 15, 2016); (ii) 2,000 shares vested on August 15, 2017; and (iii) 2,000 shares will vest on August 15, 2018. The stock options (i) have a ten-year term; and (ii) have an exercise price equal to the fair market value of the Company’s common stock as determined under the 2011 Plan, as reported in the OTCBB, on the date of grant ($5.30). In the event of the termination of each recipient’s association with the Company, the options will remain exercisable in accordance with the terms of the 2011 Plan.

On September 7, 2018, the Board of Directors elected Michael E. Rosenfeld to the Board of Directors to fill the vacancy of a Class I Director of the Company created by the death of the Company’s then President and Chief Executive Officer, Michael Offerman. Such appointment became effective on October 26, 2018.

At the same time, the Board of Directors also approved the granting of stock options to purchase shares of the Company’s common stock under the 2011 Plan to Mr. Rosenfeld as follows: He received a grant of options totalling 5,000 shares each subject to the following vesting schedule: (i) 1,000 shares vested on October 26, 2018; (ii) 2,000 shares will vest on October 26, 2019; and (iii) 2,000 shares will vest on October 26, 2020. The stock options: (i) have a ten-year term; and (ii) have an exercise price equal to the value of the Company’s common stock on the date of grant. In the event of the termination of each recipient’s association with the Company, the options will remain exercisable in accordance with the terms of the 2011 Plan.

The table below summarizes the option awards for the named executive officers and non-management directors:

Name	Stock Option Grants
David Offerman		50,000
Robert Knoth		50,000
Allen Gottlieb		5,000
Gerald Chafetz		5,000
Sonia Marciano		5,000
Eric Hugel		5,000
Michael E. Rosenfeld		5,000	*

*Options for 1,000 shares vested on October 26, 2018. Options for 2,000 shares shall vest on October 26, 2019 and options for 2,000 shares shall vest on October 26, 2020.

The following table shows the option activity for the fiscal years ended March 29, 2019 and March 30, 2018.

Stock-based compensation expense

Stock-based compensation expense, shown in the table below, is recorded in general and administrative expenses included in our statement of operations:

			Year ended		Year ended
			March 29, 2019		March 30, 2018
	Ref		(in thousands)		(in thousands)
IEH employees			$	—	$	—
Non-employee directors				35		28
Total stock option expense		(a)	$	35	$	28

(a): The Company reported compensation expense of $27,980 during the year ended March 30, 2018. The Company reported compensation expense of $35,264 during the year ended March 29, 2019.

Unrecognized stock-based compensation expense

			Year ended		Year ended
			March 29, 2019		March 30, 2018
	Ref		(in thousands)		(in thousands)
Unrecognized expense for IEH employees			$	—	$	—
Unrecognized expense for Non-employee directors				42		14
Total unrecognized expense		(b)	$	42	$	14

(b): Unrecognized stock-based compensation expense related to prior years’ equity grants of stock options to non-employee directors, that had not vested as of the end of the applicable fiscal year. The Company expects to recognize $25,454 in stock option compensation expense for the fiscal year ended March 2020 and $16,992 for the fiscal year ended March 2021.

Note: Stock option grants to IEH officers, directors and key employees in the fiscal years ended March 29, 2019 and March 30, 2018 were valued using a Black-Scholes model, under the following criteria:

	March 29, 2019			March 30, 2018
Risk free interest rate		2.40	%		2.09	%
Contractual term		10 years			10 years
Dividend yield		—			—
Expected lives		10 years			10 years

The following table shows the activity for the fiscal years ended March 29, 2019 and March 30, 2018.

					Weighted Avg.		Remaining		Aggregate
					Exercise		Contractual		Intrinsic Value
		Shares			Price		Term (Years)		(in thousands)
Outstanding at the Beginning of the Year	3/31/2017		255,000		$	6.15		8.82	$	125
Granted			0
Exercised			0
Forfeited or Expired			0
Outstanding at the End of the Year	3/30/2018		255,000		$	6.15		8.07	$	3,852
Fully Vested			251,000		$	6.02
Exercisable at the End of the Year			251,000
Outstanding at the Beginning of the Year	3/30/2018		255,000		$	6.15		8.07	$	702
Granted			5,000
Exercised			(75,000	)
Forfeited or Expired			0
Outstanding at the End of the Quarter	3/29/2019		185,000		$	6.05		7.75	$	1,832
Fully Vested			181,000		$	5.88
Exercisable at the End of the Year             March 29, 2019			181,000

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (i.e., the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, times the number of shares) that would have been received by the option holders had all option holders exercised their in-the-money options on those dates. This amount will change based on the fair market value of the Company’s common stock.