The Company has incentive stock plans, the Omnibus Incentive Plan (the Plan”) and the Omnibus Equity Compensation Plan (the Plan”). As a result of the approval of the Plan by the Company’s stockholders at the Company’s annual meeting, grants longer be issued under the Plan.

 

The Company believes that awards of long-term, equity-based incentive compensation will attract and retain directors, officers and employees of the Company and will encourage these individuals to contribute to the successful performance of the Company, which will lead to the achievement of the Company’s overall goal of increasing stockholder value. Awards granted under the Plan be in the form of incentive stock options, non-qualified stock options, shares of restricted or unrestricted stock, stock units, stock appreciation rights or other stock-based awards. Awards be granted subject to the achievement of performance goals or other conditions, and certain awards be payable in stock or cash, or a combination of the two. The Plan is administered by the Compensation Committee of the Company’s Board of Directors (the “Board”), which selects eligible employees, non-employee directors and other individuals to participate in the Plan and determines the type, amount, duration ( to exceed () years for grants of options) and other terms of individual awards. Grants under the Plan are settled primarily through the issuance of new shares of the Company’s common stock, shares of which were available for future issuance under the Plan as of

 

Stock-based compensation expense is calculated according to FASB ASC Topic , which requires stock-based compensation expense to be accounted for using a fair-value-based measurement. The Company recorded stock-based compensation expense of and for the months ended and respectively. The Company records the compensation expense related to stock-based awards granted to individuals in the same classifications in the accompanying unaudited condensed consolidated statements of income as the cash compensation paid to those same individuals. stock-based compensation costs have been capitalized as part of the cost of an asset as of

 

The following table represents stock option activity for the -month periods ended and

 

		Three-Month Period Ended								Three-Month Period Ended
		July 1, 2018								July 2, 2017
		Weighted-								Weighted-
		Average				Number of				Average				Number of
		Exercise				Options				Exercise				Options
		Price				Outstanding				Price				Outstanding
Outstanding at Beginning of Period		$	7.93				395,000			$	8.35				322,500
Granted			5.90				110,000				7.75				110,000
Forfeited			-				-				9.19				(15,000	)
Outstanding at End of Period			7.48				505,000				8.17				417,500
Exercisable at End of Period			8.15				315,000				8.03				252,500

 

As of the intrinsic value of the outstanding and exercisable stock options was and respectively. There were options exercised during either of the -month periods ended or

 

To determine the estimated fair value of stock options granted, the Company uses the Black-Scholes-Merton valuation formula, which is a closed-form model that uses an equation to estimate fair value. The following table sets forth the assumptions used to determine the fair value of the non-qualified stock options that were awarded to certain employees during the -month periods ended and which options vest over a -year period, assuming continued service.

 

		Three-Month Periods Ended
		July 1, 2018				July 2, 2017
Number of options issued			110,000				110,000
Grant date		June 13, 2018				June 8, 2017
Dividend yield			5.42	%			4.13	%
Expected volatility			25.00	%			25.00	%
Risk free interest rate			2.78	%			1.47	%
Contractual term (years)			10.00				10.00
Expected term (years)			4.00				3.00
Forfeiture rate			5.00	%			5.00	%
Exercise price (grant-date closing price) per option		$	5.90			$	7.75
Fair value per option		$	0.49			$	0.85

 

For the -month periods ended and the Company recorded compensation expense associated with stock options as follows (in thousands):

 

		Three-Month Period Ended July 1, 2018												Three-Month Period Ended July 2, 2017
		Cost of				Marketing &								Cost of				Marketing &
		Products				Administrative				Total				Products				Administrative				Total
Options Granted in Fiscal Year		Sold				Expenses				Expense				Sold				Expenses				Expense
2016		$	-			$	-			$	-			$	6			$	1			$	7
2017			6				5				11				10				2				12
2018			7				8				15				2				1				3
2019			-				1				1				-				-				-
Total stock option compensation		$	13			$	14			$	27			$	18			$	4			$	22

 

 

As of total unrecognized stock option compensation expense amounted to which will be recognized as the underlying stock options vest over a weighted-average period of years. The amount of future stock option compensation expense could be affected by any future stock option grants and by the separation from the Company of any individual who has received stock options that are unvested as of such individual’s separation date.

 

The Board granted the following shares of non-vested stock to the Company’s nonemployee directors:

 

Number of Shares			Fair Value per Share			Grant Date
28,000				$5.50		August 9, 2017
28,000				10.08		August 10, 2016
28,000				8.20		August 12, 2015

 

These shares vest over a -year period, assuming continued service. The fair value of the non-vested stock granted to the Company’s nonemployee directors was based on the closing price of the Company’s common stock on the date of each grant.

  The Company maintains a performance bonus plan for certain executive officers that provides for awards of shares of common stock in the event that the aggregate average market value of the common stock during the relevant fiscal year, plus the amount of cash dividends paid in respect of the common stock during such period, increases. These individuals instead be awarded cash, if and to the extent that insufficient shares of common stock are available for issuance from all shareholder-approved, equity-based plans or programs of the Company in effect. The performance bonus plan also imposes individual limits on awards and provides that shares of common stock that be awarded will vest over a -year period. Compensation expense associated with performance bonus plan awards are recognized over a -year period – the fiscal year in which the award is earned, plus the -year vesting period.

 

In connection with the performance bonus plan, the Company granted shares of common stock and recognized or will recognize compensation expense as set forth below:

 

										Fair
Fiscal						Fiscal				Value
Year		Shares				Year				Per				Compensation expense recognized during fiscal year
Earned		Granted				Granted				Share				2016				201 7				201 8				201 9
2016			41,205				2017			$	7.865			$	108,000			$	108,000			$	108,000			$	-
2017			42,250				2018				8.271				-				116,000				116,000				116,000

 

The table below sets forth the vesting of shares issued in connection with the grants of shares set forth in the above table. Each of the individuals holding shares that vested surrendered to the Company the number of shares necessary to satisfy the income tax withholding obligations that arose from the vesting of the shares. The table below also sets forth the taxes remitted to the appropriate taxing authorities on behalf of such individuals.

 

						Vesting of shares during the three-month periods ended
Fiscal						July 1 , 201 8												July 2 , 201 7
Year		Shares				Shares				Aggregate				Taxes				Shares				Aggregate				Taxes
Granted		Granted				Vested				Value				Remitted				Vested				Value				Remitted
2017			41,205				20,601			$	122,000			$	39,000				20,604			$	167,000			$	56,000
2018			42,250				21,125				124,000				56,000				-				-				-
		Total					41,726			$	246,000			$	95,000				20,604			$	167,000			$	56,000

 

For the -month periods ended and the Company recorded compensation expense associated with stock grants, which is included in marketing and administrative expenses in the accompanying unaudited condensed consolidated statements of income, as follows (in thousands):

 

		Three-Month Period Ended July 1, 2018												Three-Month Period Ended July 2, 2017
						Nonemployee				Total								Nonemployee				Total
Stock Granted in Fiscal Year		Employees				Directors				Expense				Employees				Directors				Expense
2016		$	-			$	-			$	-			$	-			$	29			$	29
2017			-				35				35				27				35				62
2018			29				19				48				29				-				29
Total stock grant compensation		$	29			$	54			$	83			$	56			$	64			$	120

 

As of total unrecognized compensation expense related to the Company’s non-vested stock grants amounted to which will be recognized over the respective vesting terms associated with each block of non-vested stock indicated above, such grants having an aggregate weighted-average vesting term of days. The amount of future compensation expense related to the Company’s non-vested stock grants could be affected by any future non-vested stock grants and by the separation from the Company of any individual who has non-vested stock grants as of such individual’s separation date.