SHARE-BASED COMPENSATION

6 Months Ended

Dec. 27, 2014

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

Share-based Compensation

The Company’s incentive plan provides for equity and liability awards to employees and non-employee directors in the form of stock options, stock appreciation rights (SARs), restricted stock, restricted stock units, stock awards, stock units, performance shares, performance units, and other stock-based or cash-based awards. Compensation cost is recognized on a straight-line basis over the requisite employee service period, which is generally the vesting period, and is recorded as employee compensation expense in cost of goods sold and selling, general and administrative expenses. Share-based compensation is recognized only for those awards that are expected to vest, with forfeitures estimated at the date of grant based on historical experience and future expectations.

In addition to service conditions, SARs contain a performance condition. The additional performance condition is based upon the achievement of Return on Invested Capital (ROIC) goals relative to a peer group. All awards with performance conditions are measured over the vesting period and are charged to compensation expense over the requisite service period based on the number of shares expected to vest. The SARs cliff vest after a three-year period from date of grant and expire five years from date of grant.

The grant date fair value for the awards granted below were estimated using the Black Scholes option valuation method:



	October 31, 2014		July 31, 2013		July 25, 2012		January 26, 2012		July 27, 2011
SARs Granted	213,166		213,166		210,666		32,000		184,666
Strike Price	$	8.22	$	11.34	$	7.44	$	6.30	$	4.40
Fair Value	$	3.04	$	4.67	$	3.71	$	3.08	$	2.20

Total share-based compensation expense recognized during the three months ended December 27, 2014 and December 28, 2013 was approximately $179,000 and $181,000, respectively. Total share-based compensation expense recognized during the six months ended December 27, 2014 and December 28, 2013 was approximately $344,000 and $335,000, respectively. As of December 27, 2014, total unrecognized compensation expense related to unvested share-based compensation arrangements was approximately $1.2 million. This expense is expected to be recognized over a weighted average period of 2.08 years.

No options to purchase shares of common stock or SARs were exercised during the three months ended December 27, 2014. During the three months ended December 28, 2013, 12,430 options to purchase shares of common stock were exercised and 15,000 SARs were exercised, with an intrinsic value of $0.2 million. During the six months ended December 27, 2014, 4,930 options to purchase shares of common stock were exercised with an immaterial amount of intrinsic value and no SARs were exercised. During the six months ended December 28, 2013, 19,930 options to purchase shares of common stock were exercised and 30,000 SARs were exercised, with an intrinsic value of $0.3 million.